Online retail sales down in June
The e-commerce sector contracted in June, with online retail sales falling 1.6 per cent month on month on a seasonally adjusted basis, according to the latest Online Retail Sales Index from NAB.
This is despite End of Financial Year sales occurring in June, which helped drive up overall retail sales in the month, according to data from the Australian Bureau of Statistics.
The weaker result in June is the latest in a volatile few months for e-commerce in Australia. Seasonally adjusted, online sales were up 3.4 per cent month on month in May, but down 3.6 per cent month on month in April.
“Online retail sales tend to be more volatile than broader retail, experiencing far greater monthly fluctuations,” NAB’s chief economist Alan Oster explained in a statement.
Oster noted that year-on-year growth in June was still positive. Seasonally adjusted, online sales were up 0.5 per cent compared to June 2018, though he noted that June to September 2018 was one of the strongest growth periods in the history of NAB’s online retail sales index.
“At that time, major new online merchants established an Australian presence, and pre-GST exemptions were in effect,” Oster said.
By category, sales contracted in three of the eight online retail categories from May, including a 7.1 per cent month-on-month decline in homewares and appliances, a key contributor to the headline result given its status as the largest online sales category.
Media and grocery and liquor also contracted in the month, while takeaway food, the smallest sales category, recorded the fastest growth.
“The structural changes occurring in the sector, by way of high profile exits and consolidation, have affected sales growth, so the latest result needs to be read with this in mind,” Oster commented.
Sales contracted month on month in June in all states and territories except for WA and the ACT, which saw gains of 2.4 per cent month on month and 4.5 per cent, respectively. Tasmania saw the biggest monthly decline with a 6.4 per cent fall.
Sales were slightly up month on month in metropolitan areas, while online sales in regional areas fell 3.1 per cent, except for WA, where sales grew in both metro and regional areas.
Both domestic and international online retailers saw sales contract month on month, though domestic retailers performed slightly better than their overseas competitors.
According to NAB, Australians spent an estimated $29.32 billion on online retail in the 12 months to June, which is just over 9 per cent of total retail spend, according to ABS data from May. This is about 12.7 per cent higher than the 12 months to June 2018.