Online sales slow this year as inflation bites

Rakshnna Pattabiraman

19th Apr 2023

Rising living costs and inflation appear to have dented online spending with one payments company estimating consumers forked out $124.1 million less in the first quarter than a year ago.

Fintech payments company Airwallex’s first Digital Economy Index found local businesses were a “first choice” for Australian consumers bumping e-commerce income significantly in NSW (by 12.9 per cent), Queensland (by 6.14 per cent) and Tasmania (by 1.9 per cent).

However, a lag in attracting education spending and softened tourism drove a spending slump in Victoria at 25 per cent, South Australia at 13.6 per cent and WA at 36 per cent.

International demand for Australian brands also suffered during the period as overseas sales slipped 6 per cent, but were offset by domestic consumption.

Airwallex’s director of strategy for ANZ, Amelia Hamer, said although online businesses are holding strong, they aren’t immune to global economic headwinds.

“Consumers are still drawn to spend with digital brands, but their reliance on them has waned post-lockdowns. Australian online businesses need to work harder to find opportunities to grow their income and revenue.”

Although post-Covid recovery has been “patchy” nationwide, the education and travel categories experienced the most significant year-on-year growth at 95.7 per cent and 207.6 per cent respectively.

The company did not detail the sample base size.

• Further reading: Aussies are spending more online, but cart size is shrinking