Australians spent over $20 billion online last year, and that figure's growing rapidly

Photo by Chris Jackson/Getty Images

Australian online retail sales topped $20 billion in the 12 months to June, accounting for around 6.8% of spending at traditional bricks-and-mortar retailers.

And it’s growing at a phenomenal rate.

According to the latest National Australia Bank Online Retail Sales Index, sales rose to $20.1 billion over the 2015/16 financial year, up an enormous 13.5% on the levels of a year earlier.

“The share of total online spending is dominated by homewares and appliances, groceries and fashion — with media contributing the most in the past year,” said Alan Oster, chief economist at the NAB.

“Takeaway food continues to have the fastest annual online sales growth, growing 56% in the past year. It shows the rapidly changing behaviours of consumers in the way they’re ordering takeaway as apps and new services enter the market.”

Other key findings from the report, released quarterly, was that sales growth at small online retailers — defined as those with revenues of less than $2.5 million — grew by 22.2% over the past year. They now make up around 37% of all online retail sales.

There was also a sharp divergence between the performance of domestic retailers compared to those operating overseas, with sales at local firms jumping by 16.9%, well ahead of the minuscule 0.9% increase recorded at overseas retailers.

“Whilst there has been a slight appreciation in the Australian dollar in recent months, the dollar continued downward trend has resulted in the domestic share of spend continuing to grow,” said Oster. “Domestic retailers were particularly buoyant in homewares and appliances, personal and recreational goods and groceries.”

In a statistic that may surprise a few, the report notes that 81% of online sales went to domestic retailers last year. And that proportion is growing.

By age group, the NAB notes that sales were dominated by those aged 35-44 year with most of their purchases concentrated in groceries and liquor (20.5%) and homewares and appliances (19.2%).

Younger Australians, on the other hand, spent most on fashion (22%) and media (19.9%).

Mirroring the divergent economic performance across Australia over the past year, the NAB notes that spending growth shifted from Western Australia to the eastern states with around 76% of total online spending made by residents in New South Wales, Victoria and Queensland.

While total sales were dominated by the most populous states, on a per capita basis, residents in the ACT, Northern Territory and Western Australia spent more than the national average.

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