The vast majority of online shopping by Australians is on local websites according to data from NAB Bank. The National Australia Bank’s latest Online Retail Sales Index valued online sales in Australia for the year to April 2012 at $11.1 billion.
The Index found that online sales are equivalent to 5.1 per cent of traditional retail spending, up from 4.9 per cent in 2011. There has been a clear slowdown in growth over the past year, with the year-on-year growth rate declining to just 15 per cent for the month of April – although growth in online sales continues to outpace traditional retail.
But there was a surprise figure which sheds new light on retailer angst about the impact of the $1000 tax free threshold and concerns overseas websites are stealing a growing amount of business from local retailers.
The Index found that domestic retailers – those that are Australian for tax purposes – continue to dominate online retail sales, with a 73 per cent share of the market.
NAB head of consumer sectors, David Thorn, said while online sales are becoming a larger proportion of retailer turnover, businesses are taking a multi channel approach by developing an online presence alongside a traditional storefront.
“There’s no doubt that Australia’s retail sector is undergoing a structural change as consumers become more sophisticated in their purchasing decisions and how they engage with a retailer,” he said.
Growth in domestic sales pulled back to 16 per cent year-on-year, compared to international sales which increased by 13 per cent year-on-year to April 2012.
Other key findings:
Who are the big spenders? Australia’s online spending continues to be dominated by those in their 30s and 40s, with Gen Y spending remaining below average. Under 30s are spending more on online department stores and recreation, whereas over 60s spend more on food and beverages. The under 30s have a higher propensity to purchase from international retailers – one third of spending from 30s is made overseas compared to a quarter for all other age groups.
Metro versus regional spend: The majority of online purchases continue to be made by metropolitan residents, accounting for 72 per cent in the year to April 2012. While coming from a lower base the growth of regional spending has outperformed that of metropolitan spending since the start of 2011.
State-by-state analysis: Western Australia (WA) remains the notable stand out of online sales growing by 32 per cent year-on-year – more than double the national average.
By age group: There some notable divergences from the national average in WA with growth rates considerably stronger in WA for those in the 30s, 40s and 50s. In per capita terms, online spending remains the strongest in the ACT and NT.
By comparison, per capita spending of SA in particular, but also Victoria and Queensland is well below the national average.
The Index is based on 2 million non-cash transactions per day, scaled up to replicate the broad economy. The NAB Online Retail Sales Index tracks online retail spending across sectors, demographics, locations and the breakdown of goods bought from domestic and international online retailers.
