Voice of the Industry

Australia – overview of key ecommerce insights and trends

Tuesday 29 August 2023 13:40 CET | Editor: Raluca Ochiana | Voice of the industry

This is a snapshot of the insights that matter most when measuring the size and type of opportunities in the ecommerce market in Australia.


In this article, which was first published in ‘eCommerce Insights and Trends Snapshot: Australia’, an eBook produced in association with our partner ACI Worldwide, we will analyse the local payments and ecommerce space by having a closer look at the main trends and developments in how people shop and pay online in Australia.

General overview

Australia has a rapidly growing ecommerce market, with online sales accounting for a larger share of overall retail sales each year – and with an expected year-on-year increase of 16.8% in 2023.

As a result, even though local brands have been presented with many opportunities and chances for growth, they also have faced various obstacles as local ecommerce grew strongly. This brought about an abrupt and lasting change in consumer behaviour, resulting in a shift in how shoppers buy and pay for their purchases. They are more accustomed to buying products online from a wider range of retailers and categories, and now, more than ever before, retailers must find ways to streamline the online shopping experience in order to remain competitive in the market.

Factors accelerating ecommerce growth

One of the accelerating factors behind ecommerce growth in recent years is represented by the lockdowns that were in place during the COVID-19 pandemic, when consumers turned to online shopping in record numbers – according to Australia Post, over four in five Australian households (almost 9 million) made an online purchase at some point in 2020. This resulted in online purchases growing by 57% compared to the previous year, and Australian shoppers spending USD 50.46 billion online.

As expected, this translated into growing popularity when it comes to online payment options, with consumers opting more often for contactless payment methods and mobile payment apps and e-wallets. Australian businesses have been quick to adapt to this trend, with many investing in ecommerce platforms and online payment solutions to meet the changing needs of their customers. Other factors driving growth in the Australian ecommerce market are simplicity and speed, security, and paying in instalments.

Consumers’ preferences in terms of online shopping

Of all the product categories available online, the most popular ones in Australia include clothing, which is the most common category purchased online, followed by shoes, bags and accessories, consumer electronics, and cosmetics and body care. The products purchased online less often are toys and baby products, furniture and household goods, and sports and outdoor products.

When we take a closer look at the online stores and marketplaces that are popular in Australia, we see that many of them are local brands, such as Woolworths, Coles, Officeworks, or JB Hi-Fi. Woolworths, one of the biggest players in the Australian B2C ecommerce market, had a revenue of USD 3,874 million in 2021, followed by Coles with USD 2,211 million, and Officeworks with USD 1,004 million. Another important player in the Australian ecommerce market is the global brand Apple, which registered a revenue of USD 1,211 million in 2021. According to eCommerceDB, Woolworths, Coles, and Apple accounted for 30.2% of the top 100 online stores’ revenue in Australia that year.

The cross-border opportunity

In 2021, 20% of Australians bought products from international sellers, with 40% of recent purchases being from China, as Australia Post reports. The proportion of products bought from the US has declined recently and now accounts for 21% of overseas purchases, followed by the UK with 14%. One of the main reasons behind this decline is represented by the international freight bottlenecks caused by the pandemic.

With the reopening of the Australian borders following the COVID-19 pandemic shutdown, however, both small and medium-sized enterprises as well as larger companies have recognised the expansion potential of this market. This trend goes hand in hand with the growth of ecommerce in Australia.

The local payments space

The range of payment methods available to Australians has expanded in recent years, currently including credit cards, debit cards, BNPL, e-wallets, and account-to-account payments, in addition to cash and checks. One of the payment methods that became increasingly popular among consumers is represented by digital wallets: from March 2020 to March 2021, the number of monthly digital wallet transactions increased from 36 million to 68 million, and the total value of digital wallet transactions grew from AUD 1 billion to AUD 2.1 billion.

The demand for convenience and simplicity in ecommerce grew stronger across all demographics, highlighting the importance of payments modernisation in order to seamlessly serve online shoppers. As a result, another payment method that gained more ground among Australians, particularly millennials, is BNPL – with Afterpay, Zip, and Klarna being some of the prominent providers of this payment method, according to a survey carried out by GlobalData in 2022.

Logistics, refunds, and return policies

Delivery preferences and channels

Several major delivery companies operate in Australia, among which Australia Post, the national postal service, TNT Australia, DHL Australia, and StarTrack Courier, to name just a few. According to a report published by Australia Post, with Australian shoppers spending more time at home in recent years, there was a significant increase in home deliveries, but other delivery options also experienced a big shift, such as alternative collection points and parcel lockers.

A survey carried out by Australia Post found that the top three areas in which shoppers think retailers could make improvements are product availability, more delivery options, and eco-friendly packaging. Therefore, besides the speed of delivery, sustainable packaging and delivery options are among the key considerations when shopping online.

Refunds and return policies

According to the Australian Competition & Consumer Commission, if there is an issue with a product, consumers have the right to return it, even if it is not in its original packaging, but businesses are entitled to require proof of purchase. Consumers are responsible for returning small products that can be easily shipped, whereas businesses are responsible for covering the cost of shipping for large items like televisions, installed appliances, or heavy furniture items. Additionally, in terms of return costs, when businesses confirm a certain product has a problem, they must reimburse consumers for the return costs already paid (and displayed on the shipping receipt). Following the inspection, if the business concludes that the product does not have a problem, it may require the consumer to pay for collection and inspection costs.

This snapshot was first published in ‘eCommerce Insights and Trends Snapshot: Australia, an eBook produced by The Paypers in association with our partner ACI Worldwide – and based on data from ACI Worldwide. Download your free copy of the eBook here to gain access to a much more comprehensive analysis of the main trends and developments in the Australian ecommerce market. 

About Raluca Constantinescu

Raluca is Lead Editor at The Paypers, currently using her research skills to explore the latest trends and developments in the payments and ecommerce space, with a particular focus on cross-border payments, marketplaces and online platforms, and payment methods. She is responsible for various activities ranging from coordinating and creating the content strategy for large-scale, industry-specific reports and eBooks to analysing the hottest topics of today and discussing them with thought leaders. Connect with Raluca on LinkedIn.

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Keywords: ecommerce, marketplace, growth markets, merchants, cross-border ecommerce, local payment method, cash, BNPL, online shopping
Categories: Payments & Commerce
Countries: Australia, Australia (continent)
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Payments & Commerce

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