Soaring ecommerce take-up in Australia in 2020 signals more to come

Ecommerce has gone from strength to strength across Australia off the back of the COVID-19 global pandemic and rapidly accelerated digitisation in 2020, several new reports highlight.  

Fresh figures from Salesforce’s Holiday Insights Hub and 2020 Holiday Predictions report showed Australia and New Zealand’s ecommerce growth was the highest across the globe at 107 per cent in Q3 2020 and 108 per cent in Q2, 2020.  

Although order and traffic growth decreased in Q3 from Q2, overall order and traffic growth remained high in comparison to the same time last year. For the report authors, the figures made it clear the pandemic is continuing to impact shopping decisions and habits with shoppers increasingly turning to online retailers.  

Locally, Salesforce reported 111 per cent overall order growth in Q3, compared to 127 per cent in Q2, while traffic growth slightly decreased in Q3 to 39 per cent, compared to 47 per cent in Q2. According to the report, A/NZ retailers are seeing year-on-year growth in revenue, online traffic and order size. Despite global shopper spend growth of more than 16 per cent, however, A/NZ per-visit shopper spend decreased slightly between Q2 and Q3 to $3.17 from $3.41.  

Meanwhile, the latest This Year, Next Year: E-Commerce Forecast Report from GroupM found significantly faster rates of growth in ecommerce sales during Q1 and Q2 of 2020, with continued elevated sales in Q3, 2020 in Australia as well as Canada. The media agency has forecast nearly US$4 trillion in ecommerce sales globally during 2020, or 17 per cent of equivalent global retail sales during this year. The figures exclude food and delivery services.

According to GroupM, CPG manufacturers were huge beneficiaries of this ecommerce take-up and experienced a significant transition in how their products were bought. This led to a 277 per cent increase in retail sales via ecommerce channels in Q2, 2020. 

In Australia, the agency estimates ecommerce sales will grow to 6.6 per cent of total sales in 2021, excluding food and delivery services.

Based on these growth rates and projections, GroupM is estimating nearly US$7 trillion in retail ecommerce sales by 2024, or 25 per cent of total retail sales by that time. Should growth continue at low double-digit pace, it’s predicting ecommerce sales will rise to $10 trillion in annual sales activity by 2027.

“While we can see penetration is currently lower on this comparable measure, with ecommerce making up 6.6 per cent of retail sales in Australia, this means our market [along with Canada and Japan] will see even more rapid uptake over the next few years,” GroupM general manager of Commerce, Roger Dunn, commented.

“Locally, Amazon is rapidly expanding its network of fulfilment centres, as well as expanding its ecosystem of advertising solutions. So along with the growth of businesses like Cartology and established platforms like eBay, Australia is set to have a vibrant and growing retail media ecosystem that brands will need to navigate in order to drive growth.”

Australia’s ecommerce growth is also made plain in Australia Post’s recent eCommerce Industry Report. This report found 12.3 per cent of Australian retail sales were conducted online in March 2020, with 5.2 million households shopping online by April 2020, an increase of 31 per cent against the year-on-year average. These figures do include specialty food and liquor.

By July 2020, ecommerce had grown to comprise 14 per cent of the Australian market’s total retail sales, excluding cafes and restaurants. As a result, Australia Post is now projecting ecommerce sales will exceed 15 per cent of total sales by the end of 2020, years ahead of the 16 per cent figure Australia projected for 2025.

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