The E-Commerce

Australia - E-Commerce Market Outlook & Retail Trends in 2023

Last Updated: April 23, 2023
Welcome! Here at OOSGA, we've combined insights from our partners across various markets and our own hands-on experience to bring you this brief. If you are interested in partnering with us on our e-commerce support or research within Australia, let us know!

The Outlook

What's the Outlook of The E-Commerce Market in Australia?

The Australian online shopping sector experienced significant growth over the past few years, mainly due to the coronavirus pandemic. Australia Post reports that 81% of adults shopped online in 2021, up from 78% in 2019, while online retail spending reached 19.3% of the total, amounting to AUD $62.3 billion—a 23.4% increase from 2020. Internet usage expanded to 89.6% of the population in 2020, up from 83.5% in 2013, according to the International Telecommunication Union. The fixed broadband internet subscription penetration rate also grew, reaching 35.7% in 2020, up from 25.7% in 2013.

Although e-commerce in Australia was slow to gain traction initially, it is still highly developed and rapidly expanding. Major brick-and-mortar retail groups have established online arms, and the number of pure internet retailers continues to grow. Business-to-business and business-to-consumer transactions are increasingly popular, with e-banking embraced by the country’s major financial institutions.

Local companies such as Woolworths hold the largest share of the online market, with other domestic players like Myers, Coles, and Kogan also maintaining a strong presence. Traditional retailers are expected to continue investing heavily in digital transformation and warehouse automation. Myers, for example, has established a national distribution center in Melbourne capable of handling up to AUD $1 billion in online sales. The online grocery market is predicted to be highly competitive for business investment.

Regarding sector distribution and growth, Australia Post’s 2022 e-Commerce Industry Report revealed that variety stores accounted for 33.9% of all e-commerce spending in 2021, with 16.1% year-on-year growth. Fashion and apparel stores followed at 25.7% of spending and 12.6% growth, and home and garden retailers captured 14.7% of spending with 12.5% growth. This trend differs from other developed countries, where niche-focused sectors typically experience higher growth rates.

Table of Contents
Australia - E-Commerce & Total Retail Sales | Billion $
Australia - Retail & E-Commerce Growth | %
Australia Retail, Value Added | (% of GDP)
Australia E-Commerce Penetration Rate | (% of Total Retail Sales)

The Platforms

What's The Landscape of E-Commerce Platforms in Australia?

The 2021 Digital Life Index, published by Publicis Sapient, revealed that Australians were initially slow to embrace e-commerce, but lockdowns have accelerated consumer spending on online marketplaces. Forecasts suggest that online sales will make up over 10% of total retail sales in 2026, up from 6% in 2019. Australians have been especially active in cross-border online shopping. As more people engage and spend online, we anticipate an influx of brands entering the country and establishing a local presence.

Online marketplace operators like eBay, Amazon, and Gumtree have benefited from the shift to online channels. However, growth has not been evenly distributed. Amazon, in particular, has outperformed eBay and Gumtree, which have experienced a decline in interest and traffic over the past five years relative to their previous performance. Amazon’s rapid expansion in Australia includes opening numerous distribution centers, which enables next-day delivery to customers in Sydney and Melbourne. Amazon Prime, which offers free delivery for an annual fee, also contributes to the company’s success.

The Trends

What Are Some Retail Trends in Australia?

Buy now, pay later (BNPL) has gained traction as a popular e-commerce payment method in Australia, where debit cards are the most common form of payment, accounting for 52% of transactions and $17.2 billion in sales. While cash remains a significant payment choice for some demographics, capped interchange fees on debit and credit cards may encourage further card usage. Australians widely recognize and use Visa, Mastercard, and American Express, with mobile shoppers increasingly adopting PayPal for digital wallet transactions. Bank transfers hold a 13% share in total payments, with younger consumers driving the adoption of BNPL methods offered by intermediaries like Afterpay, which allows customers to purchase items and repay the cost in interest-free installments. This payment trend has spurred event-based shopping, such as Afterpay Day, which generates significant sales for participating e-commerce merchants. The New Payments Platform (NPP) and open banking initiatives are expected to further shape the payments sector by enabling faster transactions and data sharing, potentially leading to innovative financial products for consumers.

COVID-19 has created and accelerated new consumer purchasing behaviors, such as increased online retail sales, which are expected to persist even after the pandemic subsides. In 2022 and beyond, we anticipate that consumers will continue to make fewer shopping trips but have larger baskets, boosting the average basket size across retail sub-sectors by 8-15% (BCG estimates), particularly in the grocery sector. Growth of e-commerce is likely to continue as more first-time digital buyers enter the market and existing customers expand their online purchases. Additionally, the pandemic has heightened consumer focus on health and wellness, with over 20% of Australians looking to increase spending on products and services aimed at enhancing their wellbeing, using accumulated savings.

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Finance Environment

67.7% of Customers Shop on The Internet

In Australia, There are about 59.7% of people use credit cards, and 90% of people use debit cards. While there are 67.7% of people purchase on the internet, there is only 67.7% of people with online banking accounts.

Source:World Bank, Payment Service Providers, eMarketer

% with financial accounts

% with credit cards

% with debit cards

% get paid through digital channels

% buy on the internet

% with internet banking

% pay bill through online

% E-Commerce Penetration

Weekly Purchases

What E-Commerce Users in Australia Purchase on a Weekly Basis?

Source: Statista Digital Market Outlook

Driving Factors

For Consumers in Australia, What's The Main Drivers For Using E-Commerce?

Source: (Q3, 2021)
% of respondents think is their main drivers | Multi-select survey

What Does Consumer Goods E-Commerce Look Like in Australia?

There is 19.45 million consumer goods e-commerce users in Australia, and they spend total of around 38.26 billion USD dollars in 2021. That makes a per capita spending on consumer goods e-commerce of around  1968 USD. Also, in those e-commerce users, about 42.5% of them purchase through their mobile phone.

Australia - Consumer Goods E-Commerce Sales | Million $

Travel E-Commerce Landscape in Australia

Source: Statista Digital Market Outlook 2021
Australia - Travel E-Commerce Sales | Million $

Digital Media Landscape in Australia

Source: Statista Digital Market Outlook 2021
Australia - Digital Media E-Commerce Sales | Million $


  • Retail Sales & E-Commerce Penetration: eMarketer, Edge By Ascential, Euromonitor Retail Passport
  • Currency: Based on IMF Data 2022/12
  • Consumer Behavior: Statista Digital Market Outlook
  • Retail Channels: Euromonitor, Local Association, Financial Reports (Of Relevant Retailers)
  • Data Compilation:
  • Analysis: OOSGA CR Team Analytics
Author: Consumer Research Team

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