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E-commerce

Online sales picked up in March

Australians spent an estimated $22.23 billion online in the 12 months to March 2017, or about 7.3 per cent of the traditional bricks and mortar retail sector, according to data from NAB.

Online sales grew 0.8 per cent month-on-month in seasonally adjusted terms, an uptick from previous months, and ahead of traditional retail sales, which contracted -0.1 per cent in February 2017.

Year-on-year growth in online sales, however, was down from 10.7 per cent in February to 9 per cent in March.

Compared to the immense 44 per cent year-on-year growth seen in March 2011, this indicates the continued flattening of e-commerce growth, according to 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 annual growth of any category in March, at 20.9 per cent. It now represents 6.6 per cent of all online spending in Australia. Meanwhile, online sales of movies, books and music (media) contributed the most of any category to spending growth, making up 25.9 per cent of growth despite accounting for only 17.3 per cent of spending. The largest category by spending remains homeware, which represents 19.9 per cent of online spending.
  • International vs domestic performance: Online domestic sales accelerated month-on-month in March (1.1 per cent), while international sales contracted (-0.1 per cent). Looking back over the 12 months to March, however, the gap between domestic and international retailers appears to be closing.  Year-on-year sales growth in March 2017 was 9.1 per cent for Aussie retailers and 8.7 per cent for foreign ones, compared to this time last year, when Aussie retailers saw 19.1 per cent year-on-year growth and foreign ones only 4.8 per cent growth.
  • By age of consumer: Online spending remains dominated by those aged between 35 and 44, who make up 24 per cent of total online spending in Australia even though they’re just 17 per cent of the adult population. Young Australians aged 18-24 years old were the only age group whose spending contracted in the month. Those aged 18-34 spend the most on fashion and media, while those aged 35 and up favour homeware and appliances and groceries and liquor.
  • 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 March, although metro residents spend around 17.9 per cent more on average. One exception is regional WA, where people spend around seven per cent more than the average Australian.
  • SME online retailers: NAB estimates that online sales from SMEs are now 23 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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