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E-commerce

Online sales grew 10 per cent in December 2016

Australians spent an estimated $21.65 billion online in 2016, or about seven per cent of the traditional bricks and mortar retail sector, according to data from NAB.

Online sales grew 10.4 per cent year-on-year in December 2016, which is down from 14 per cent year-on-year growth in November last year and a sharp decrease from 27 per cent year-on-year growth in December 2011.

This trend indicates an overall flattening of growth in e-commerce, as tracked by National Australia Bank’s monthly Online Retail Sales Index.

Each quarter NAB produces an in-depth report on the Australian e-commerce sector, with data on top-performing categories, regions, age groups and businesses.

Key findings from this quarter’s report include:

  • Fastest-growing category: Takeaway food saw the fastest year-on-year growth of any category at 34 per cent. It now represents 6.4 per cent of all online spending in Australia, thanks to advancements in mobile technology and the proliferation and expansion of food delivery services. The largest category by spending remains homeware and appliances, which grew 14.5 per cent year-on-year in 2016 to represent 19.6 per cent of all online spending. Categories with the smallest growth gains last year include department stores (1.8 per cent), toys (-2.8 per cent) and groceries (2.8 per cent).
  • International vs domestic performance: Online domestic sales grew faster than online international sales last year, at 10.8 per cent vs 8.6 per cent respectively. This coincides with a depreciation of the Australia dollar, which saw Australians spending more with domestic online retailers in every category except electronic games and toys. While both domestic and international retailers saw strong growth in homeware and appliances, this category delivered the biggest gains to international retailers.
  • By age of consumer: Online spending remains dominated by those aged between 35 and 44, who make up 24.1 per cent of total online spending in Australia even though they’re just 17.2 per cent of the adult population. Those aged 45 and up spend the most in homeware and appliances, while those aged between 18 and 34 favour fashion and over 65s favour groceries and liquor. Younger Australian consumers make up more of the share of international online sales than they do domestically, while the opposite is true for older Australians (35+).
  • By state: Almost 77 per cent of total online spending in the past year was made by residents from the three largest states (NSW, VIC and QLD), whose combined population accounts for a little over 77 per cent of the Australian total. Residents in ACT, NT, WA and NSW spent more than the national average on a per capita basis.
  • Metropolitan vs regional performance: Online spending grew faster in regional areas than in metropolitan areas in December last year, although metro residents spend around 18.9 per cent more on average. One exception is regional WA, where people spend around eight per cent more than the average Australian.
  • SME online retailers: NAB estimates that online sales from SMEs are now 18 per cent higher compared to a year ago. Smaller online retailers – with revenue of less than $2.5 million – made up about 36 per cent of all online retail sales in the past 12 months.
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