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Online sales growth slows in June

Online retail sales grew just 1.2 per cent month-on-month in seasonally adjusted terms in June, down from 1.6 per cent growth in May, according to NAB’s monthly Online Retail Sales Index (ORSI).

Growth in the 12 months to June was also slower, with sales up 17.7 per cent year-on-year in June 2018, compared to 18.1 per cent year-on-year in May 2018.

E-commerce spending reached an estimated $26.5 billion in the 12 months to June, roughly 8.4 per cent of the traditional bricks-and-mortar retail sector.

Unusually, online SMEs saw slower month-on-month sales growth (o.6 per cent) than their corporate counterparts, though they continued to outpace corporates in 12-months-to terms (23.2 per cent).

Department stores recorded both the fastest month-on-month online sales growth (9 per cent) and annual online sales growth (38.4 per cent), however its contribution to total online sales growth was less than most larger spend share categories, as it represents only a moderate share of online sales.

Sales for the largest spend share category – homewares and appliances – grew again in June at 1.3 per cent month-on-month. Grocery and liquor was the only category to contract in the month (-2.5 per cent).

Media contributed almost a quarter of all sales growth over the past year, given its size and annual online growth rate (24.5 per cent), though its growth in June was relatively flat.

NAB’s ORSI also noted that domestic online sales grew in line with the total index, while international saw a slight contraction.

In June, 81 per cent of spending was with domestic retailers, which saw 1.4 per cent month-on-month growth, compared to the -0.2 per cent month-on-month growth for international online retailers.

NAB noted that while changes in the Australian dollar have coincided with changes in the relative share of domestic and international sales in the past, that has not been the case over the past 12 months.

Online spending remains dominated by those aged between 35 and 44. While spend growth remained positive across all age groups, it slowed from the month of May for all except for those aged between 25 and 34, who make up approximately 16.8 per cent of the adult population, but 24.1 per cent of spend share.

Almost 78 per cent of total online spending in the past year was made by residents from NSW, VIC and QLD, which is roughly in line with the proportion of the population that lives in these states.

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