1. Current State of the Australian eCommerce & Market Value
1A. Market Demographics
- Total Australian population 26.57 Million as of January 2024
- 50.3% population is female and 49.7% male
- The bulk of this population is in Urban areas i.e. 86.7% while rural habitancy makes up 13.3%.
- The median age of Australians is 37
The Australian eCommerce market, valued at approximately $63.6 billion in 2023, continues to evolve despite challenging economic conditions.
1B. Total Retail Spend
$361 billion was the total retail spend in 2023 by Australian consumers, this represents a 2% year-on-year growth according to the data by Australia Post.
And in 2024 Australians spent $362.78 billion on collective retail until october 2024 according to the Australian Bureau Of Statistics.
1C. Online Retail Spend (Ecommerce)
According to Auspost data a total of $63.6 billion was spent on ecommerce across all categories in 2023 by the Australian consumers, representing 16.8% of total retail spending 2023.
The total Ecommerce (online) spend for 2024 is $40.72 billion across all categories, representing approximately 9.35% of the total retail spend for 2024 calculated till October 2024.
These numbers are expected to be close to last year even after considerably different circumstances and the consumers feeling the pinch with a “cost of living crisis”.
1E. Top Online Shopping Categories
Home and Garden remains the most popular category for Australian Ecommerce shoppers, even after experiencing a -7.6% decline year over year according to the 2024 ecommerce trend report by Auspost. Most popular categories saw a declining percentage year over year apart from the second and third most categories variety stores and Food & Liquor which saw 9.1% and 2.4% growth respectively.
- Home & Garden $16.0 billion (-7.6% YoY)
- Variety Stores $15.8 billion (+9.1% YoY)
- Food & Liquor $13.2 billion (+2.4% YoY)
- Fashion $9.6 billion (-8.7% YoY)
- Hobbies & Recreational Goods $3.9 billion (-2% YoY)
- Health & Beauty $2.9 billion (-2% YoY)
- Books Print & Stationery $1.6 billion (-1.8% YoY)
1F. Regional Growth
When we think of online shopping we don’t immediately think of regional areas but surprisingly the Australian consumers in regional areas are more active online shoppers compared to their fellow metropolitan Australians.
This trend makes sense in hindsight as metropolitan areas have a plethora of choice and physical availability of retail brands. There is capital and demand for retail shopping but the lack of availability encourages the regional inhabitants to turn to ecommerce for their shopping needs. This is supported by a good logistics and delivery network that Australia has.
Regional areas experienced an 18% increase in online shopping since 2019, outpacing metropolitan growth at 16%.
1G. Ecommerce Growth By State
In line with the regional growth data we are seeing more ecommerce adoption in other states of Australia than New south wales, Victoria and ACT.
- Western Australia +5.1% YoY
- Northern Territory +4.6% YoY
- Queensland and Tasmania +4.3% YoY
- South Australia 2.8%
- Victoria -1% YoY
- NSW -2.1% YoY
- ACT -2.3% YoY
1H. Mobile vs Desktop Share in eCommerce
Mobile usage surpasses desktop around 2024, with mobile forecasted to account for nearly 75% of eCommerce traffic by 2029 according to Statista.
1i. Average Revenue per User (ARPU) by Category
Electronics and Fashion lead ARPU, with Electronics forecasted to generate over $4,000 per user By 2029 according to Statista..
1J. User Numbers Growth
User numbers continue to increase steadily year over year and are forecasted to surpass 32 million by 2029. Penetration rates grow from 30% to and forecasted to grow over 85% by 2029.
1k. Revenue by Product Categories
Fashion leads revenue generation, followed by Beauty and Electronics.
Some interesting Highlights
- Mobile users have a higher ARPU compared to desktop users.
- Preference for small-to-medium order values (e.g., $30–$50) has grown, while orders over $500 have declined by 3% since 2021
- Increased use of automated price tracking tools (65% popularity)
1L. Australian Ecommerce Marketplaces
The Australian eCommerce market is increasingly dominated by marketplaces where different sellers list their products. Amazon is leading the charge in this space, followed by eBay, and newer entrants like Shein and Temu rapidly gaining traction.
Here's a snapshot of the major players
Amazon In Australia
With the largest product range, most trusted quality, and efficient logistics, Amazon has become Australia's top choice when it comes to ecommerce marketplace preference, surpassing eBay.
Its dominance is supported by a growing Prime membership and a strong foothold in health, fitness, and home categories.
- Amazon overtook eBay to become Australia’s leading marketplace in 2023.
- It recorded 75.2 million average monthly site visits, surpassing eBay by 48%.
- Sales from Amazon’s marketplace grew significantly
- Direct sales $1.29 billion, up from $883.3 million in 2022.
- Third-party revenue $316.9 million, up from $181.7 million in 2022.
Consumer Demographics
- Attracts premium shoppers 80% of those with $200k+ household income have purchased on Amazon.
- Over-indexed in the 35–44 age group, with 73% of this demographic using the platform.
Advantages
- Largest product range (64% of shoppers agree).
- Most trusted marketplace for product quality (58%).
- Efficient returns process Preferred by 49% of consumers.
- Growth in Amazon Prime Subscribers increased to 4.5 million, with a 45% penetration rate.
Popular Categories
Top categories were Books & eBooks, Electronics, Home & Kitchen. But Health and self-care categories grew significantly as well, particularly Vitamins & Supplements (+43%), Skincare & (Makeup +40%).
eBay In Australia
Despite its decline, eBay remains a key player with a loyal customer base, particularly among older demographics. Its focus on electronics and clothing continues to attract shoppers, though competition is eroding its market share.
Dominance
- Remains the second-largest marketplace with 50.9 million average monthly site visits.
- However, popularity declined by 8%, with fewer consumers (57%) purchasing on the platform in 2023.
Consumer Demographics
- Resonates more with men (55%) compared to women (44%).
- Strong in the 45–54 age group, with 73% of this demographic shopping on eBay.
Key Advantages
- Known for Electronics and Clothing categories.
- Offers access to 40,000 Australian businesses and 12 million unique visitors monthly.
Challenges
- Declining younger user base Only 38% of 18–24-year-olds purchased on eBay in 2023.
- Competition from Amazon and emerging marketplaces continues to erode its market share.
Shein & Temu
These Chinese backed platforms are emerging as key disruptors, these platforms cater to young, fashion-forward shoppers. Shein’s appeal lies in affordability and trendiness, while Temu’s sticky app experience keeps users engaged longer.
With their unbelievably low prices and ultra aggressive advertising campaigns these platforms are targeting the masses and making retail more accessible to price sensitive shoppers.
Shein
Dominance
- Emerging as a key player, especially among younger consumers.
- 47% of 18–24-year-olds purchased from Shein in 2023.
Consumer Demographics
- Female shoppers dominate 80% female vs. 19% male buyers.
- High-income shoppers ($160–199k) 34% have purchased from Shein.
Popular Categories
Clothing & Accessories, Home products.
Strengths
- Strong brand appeal and affordable fashion.
- Rapid app adoption with 4.7 million monthly site visits in Australia.
Temu
Dominance
- Fastest-growing marketplace in Australia, with 25% of shoppers purchasing in its first year.
- Ranked as the eighth-largest online retail brand, gaining 9.2 million users within 8 months of launching.
Consumer Demographics
- Female users dominate (59%), but it has a balanced appeal compared to Shein.
- High engagement Average user spends 18 minutes daily on the app, nearly double the time spent on Amazon.
Popular Categories
Clothing, Shoes, Accessories, Home products.
Kogan & Catch
While both platforms are recalibrating strategies to adapt to market changes, they face significant challenges from larger players like Amazon.
Kogan
Performance
- Delivered $489.5 million in revenues in 2023, with a strong focus on Electronics and Home categories.
- Earned a profit of $6.8 million despite inventory realignment.
Consumer Demographics
Appeals to mid-to-high-income buyers, with 25% of $160–199k+ households purchasing from Kogan.
Challenges
Despite loyalty program growth (401,000 members), competition with Amazon and eBay is intense.
Catch
Performance
- Reported a 31% drop in full-year sales to $354 million.
- Offers 2.5 million products across 1,600 sellers, but its influence is waning.
Demographics
- Strong with high-income buyers (43% of $200k+ households).
- Appeals to the 35–44 age group, with 37% of these shoppers purchasing from Catch.
Challenges
Plans to reduce underperforming product lines and focus on profitable categories.
MyDeal
Undergoing a transformation post-acquisition by Woolworths, MyDeal has potential for growth but currently lags far behind competitors.
Market Position
- Struggling with only 2.3 million monthly site visits, the lowest among tracked marketplaces.
- Acquired by Woolworths, with plans to integrate with MarketPlus for broader reach.
Consumer Demographics
- 59% of shoppers are female.
- Popular in the 45–54 age bracket.
Top Categories
Clothing & Accessories, Home products.
1M. More Buying On Sales Events
Black Friday and Cyber Monday saw massive growth in online purchases, up 88% and 70%, respectively, compared to 2019. Events like EOFYS and Boxing Day also surged, emphasizing the value of targeted promotions.
- Black Friday Online purchases up 88% since 2019.
- Cyber Monday +70% since 2019.
- EOFYS +75% since 2019.
- Boxing Day +67% since 2019.
1N. Recommerce
Australia's second hand economy is valued at $60 billion in 2022. But what is Recommerce you ask?
It refers to the process of reselling pre-owned or used products to new buyers, typically through online platforms or specialized marketplaces. It’s a growing trend in the eCommerce space, driven by consumer interest in sustainability, affordability, and reducing waste.
1O. Social Commerce
What is Social Commerce?
It refers to the use of social media platforms to promote, sell, and purchase products or services directly within the platform's ecosystem. Unlike traditional eCommerce, which typically involves directing users to external websites, social commerce allows the entire shopping experience—from discovery to checkout—to take place on a social media platform.
- The number of users engaging in social commerce has grown steadily, starting from approximately 2.5% in 2018 to 12% in 2029.
- User penetration grows steadily from 10% in 2017 to nearly 37% in 2029.
2. Consumer Preferences & Key Trends
2A. Consumer Behavior Across Generations
Online behaviours, Consumer spending and preferences vary significantly by generation (age group) due to exposure and adoption of technology and the rate of keeping up with modern trends. Let's look at what the data says about how different generations behave when it comes to the Australian ecommerce buyers.
Gen Z (18-26)
Spent $10.6 billion online, primarily on fashion (23% of spend). Their Average order value was $80. They a have a particular focus on affordable fashion and sustainability.
They value seamless returns and are highly likely to switch retailers for faster delivery.
Gen Y (27-43)
The largest contributors , spending $22.1 billion with a focus on Home & Garden and Fashion. Online shopping dominates their retail habits, with 23% of their spending occurring online. Their Average order value was $95
Speed and sustainability are critical factors.
Gen X (44-59)
Spent $17.5 billion, favoring Home & Garden (29% of spend). Their Average order value was $110
Tend to prefer free shipping promotions and value real-time updates during delivery.
Baby Boomers (60-78)
Spent $12.5 billion, with notable growth (+7% YoY) in online spend. Their Average order value was $109.
Gradually embracing online shopping, prioritizing trust, simplicity, and sustainability.
2B. Why Do Aussies Shop Online?
Convenience and value remain at the forefront of why consumers choose to shop online. Among 18-49-year-olds, 58% are willing to pay more for convenience, underscoring the importance of ease and accessibility in driving online purchasing behavior. Key motivators include free delivery, lower prices, discounts, and price comparison tools, all of which contribute to a seamless shopping experience.
Additionally, sustainability is becoming a significant factor in brand choice, with 46% of online shoppers preferring to buy from sustainable brands. For these consumers, value for money remains the top priority, followed by positive shopping experiences, quick delivery and return options, consistent quality, and great reviews.
This dual focus on convenience and value highlights the evolving expectations of online shoppers, requiring businesses to optimize both their user experience and their brand positioning to capture consumer loyalty.
2C. How do Australians discover products and brands?
Consumers today rely on diverse channels to discover products, with search remaining the dominant tool in online shopping journeys. Retailers’ websites, online marketplaces, and price comparison platforms also play pivotal roles, underscoring the importance of a multi-channel presence.
Social media has become a critical discovery platform, particularly for millennials and Gen Z shoppers. In Australia, 59% of 18–39-year-olds rely on social media to find products they purchase, with 47% showing similar behavior in New Zealand. Platforms like Instagram and TikTok now serve as vital spaces for influencing purchase decisions.
Shoppable ads are also reshaping the digital landscape. These seamless, interactive ads have gained traction, with 62% of young Australians aware of this format and 23% already purchasing through it. This highlights a growing demand for convenience and immediacy in online shopping experiences.
To thrive, businesses must optimize for search, embrace social commerce, and leverage shoppable ads to align with evolving consumer behaviors and expectations.
2E. Increased Adoption
With more and more people adopting ecommerce, 80% of households shopped online in 2023, totaling 9.5 million households, marking a 1.4% year-on-year increase.
1 in 7 households made weekly online purchases. Households are making smaller but more frequent purchases, with an average basket size of $98.10, down by 4.6% from 2022
2F. Smarter & Smaller shopping
- Inflation continues to influence shopping behavior across Australia and New Zealand. While discretionary spending on goods increased slightly by 1.1% in 2023, it is clear that consumers are becoming more cautious.
- Non-discretionary spending (e.g., essentials like groceries and utilities) grew significantly by 10.7%, emphasizing that consumers are prioritizing necessities over luxury items.
- Shoppers are adopting a "little and often" approach, making smaller, more frequent purchases rather than high-value orders, reflecting economic uncertainty and tighter budgets.
- The $30–$50 price range has seen a significant 7% increase since 2021, indicating a trend toward value-oriented purchases. This aligns with consumer frugality and a preference for manageable spending amounts.
- Orders over $500 have decreased by 3%, reflecting a cautious approach to big-ticket purchases amid economic challenges. Even within the mid-range ($100–$500), orders declined by 6%, suggesting a focus on smaller, essential items.
2G. Marketplace or Brand website?
Pattern asked Australian consumers in a survey
“Why have you bought from brands’ websites instead of Amazon or other online retailers in the last 12 months?” Here is what they said.
As consumers discover their money is not stretching as far due to cost of living pressures, they are increasingly buying direct from brands online so they benefit from loyalty schemes (+17%), view more detailed product information (+25%), and access the most competitive prices (+6%).
2H. Payment Preferences
PayPal remains the most preferred payment method in Australia, accounting for 31% of transactions, tied with combined Visa and Mastercard usage at 31%. The ease of use and security offered by PayPal drive this preference.
Buy Now, Pay Later (BNPL) Services are getting more popular. 43% of Australians used BNPL services at least once every six months as of July 2024.
59% of Gen Z (18-24) and 59% of Gen Y (25-39) find BNPL better than other payment options.
2i. Customers Are Demanding Personalization
53% of online shoppers desire personalized experiences from retailers and expect tailored experience on the merchant websites and apps. Features like personalized recommendations (45%) and virtual try-ons (36%) are increasingly preferred
2J. Domestic Preference
31% of online shoppers intend to purchase Australian-made products. 28% of Australians bought products from international sellers in 2022; only 6% of international buyers purchased from Australian sellers online.
2k. Sustainability Focus
Transparency in sustainability claims is increasingly vital, especially with younger consumers prioritizing eco-friendly practices. Initiatives like recommerce and carbon-neutral shipping are gaining traction.
- 62% of shoppers are willing to pay extra for sustainable products particularly Gen z. 93% of Gen Z prioritize sustainability in purchasing decisions.
- 57% of businesses were flagged for potential greenwashing by ACCC.
2L. Return Policies
Flexible and transparent return policies are critical. Studies show that 76% of shoppers review return policies before purchasing; interestingly, 82% of shoppers are unaffected by "no returns" policies for final sale items.
3. Digital Behavior & Social Media
3A. Cart Abandonment, loyalty programs & Delivery
According to a survey of Australian online shoppers high shipping costs deter 97% of shoppers, and unexpected fees lead 89% to abandon their carts. Transparency in pricing and delivery costs is critical for reducing cart abandonment.
- 94% of shoppers abandon carts due to distrust in site security, highlighting the importance of displaying trust signals like HTTPS, third-party certifications, and transparent policies.
- Consumers are increasingly tolerant of 5–7 day shipping, with 42% stating it won't deter their purchase.
- 27% are willing to pay $20 for same-day delivery, highlighting opportunities for premium services.
- Free shipping (78%) and redeemable points for discounts (60%) are the most valued loyalty rewards
- The acceptable shipping cost for small items rose to $9.32 in 2024, up from $8.58 in 2021, reflecting increased tolerance for delivery fees.
- For larger items, consumers are willing to pay an average of $12.50, up by $3.19 from 2021, showing an understanding of logistics costs.
- “Free delivery” is what most Aussies said when asked, “What would cause you to buy from an online retailer again?”
- 78% of shoppers prefer free shipping as a loyalty reward, showing that convenience drives engagement.
- Points redeemable for discounts (60%) and free products (57%) are also highly valued. Programs offering practical and easily accessible rewards tend to see higher participation.
3B. Social Media and Digital Behaviour of Australians
Out of the 25.21 million internet users 20.80 million used social media which means that 78.3% of the Australian population is on social media.
25.21 million internet users were recorded at the start of 2024 which makes the internet penetration rate 94.9% - it is safe to say that most of the retail buyers are online and browsing.
In January 2024, 20.8 million Australians, equivalent to 78.3% of the total population, were active on social media, reflecting a decline of 500,000 users (-2.3%) compared to early 2023.
Among adults aged 18 and above, 18.03 million (86.5%) were social media users.
Overall, 82.5% of Australia’s internet users engaged with at least one social media platform. Additionally, the user base was nearly evenly split by gender, with 50.7% female and 49.3% male.
Platforms like Facebook and Instagram lead the revenue share, with steady growth projected through 2029.
Facebook (53%) and Instagram (35%) are the most influential platforms driving online purchases
Facebook In Australia
Meta’s Facebook is showing growth in user numbers and subsequently its ad reach within Australia. Between January 2023 and January 2024, Facebook’s potential ad reach in Australia grew by 1.8 million users (+11.7%). However, between October 2023 and January 2024, the reach decreased by 100,000 users (-0.6%).
Important Context
- Facebook’s ad reach figures differ from Meta's monthly active users (MAU) and daily active users (DAU) metrics reported in earnings.
- These estimates account for factors like user-reported demographics, multiple accounts, and temporary visitors, and are not directly comparable to population or census data.
Ad Reach as a Percentage
- Ad Reach Growth Between January 2023 and January 2024, Facebook’s potential ad reach in Australia grew by 1.8 million users (+11.7%). However, between October 2023 and January 2024, the reach decreased by 100,000 users (-0.6%).
- Facebook’s ad reach accounted for 62.7% of Australia’s total population.
- When limited to individuals aged 13 and above (the eligible audience), ad reach was 74.1%.
- Facebook’s ad reach represented 66.0% of Australia’s internet user base.
- Gender Split At the beginning of 2024, 52.0% of Facebook’s ad audience in Australia was female, while 48.0% was male.
YouTube in Australia
Ad Reach and Audience
- YouTube had a potential ad reach of 20.8 million users in Australia at the start of 2024, equivalent to 78.3% of the total population.
- Ads reached 82.5% of Australia’s internet user base.
Demographics
Of YouTube’s ad audience, 50.7% were female and 49.3% were male.
User Growth
- YouTube’s ad reach decreased by 500,000 users (-2.3%) between January 2023 and January 2024.
- No change in ad reach was observed between October 2023 and January 2024.
Instagram In Australia
Ad Reach and Audience
- Instagram had 13.95 million users in Australia, equivalent to 52.5% of the total population.
- Among the eligible audience (13+), Instagram's ad reach was 62.1%.
- Instagram’s ad reach represented 55.3% of the internet user base.
Demographics
55.7% of Instagram’s ad audience was female, while 44.3% was male.
User Growth
- Between January 2023 and January 2024, Instagram's ad reach increased by 2.3 million users (+19.7%).
- On a quarterly basis, Instagram’s ad audience grew by 250,000 users (+1.8%) from October 2023 to January 2024.
Tiktok In Australia
Ad Reach and Audience
- TikTok had 9.73 million users aged 18 and above in early 2024.
- TikTok ads reached 46.6% of adults aged 18 and above and 38.6% of the local internet user base.
Demographics
50.9% of TikTok’s ad audience was female, while 49.1% was male.
User Growth
- Between January 2023 and January 2024, TikTok’s ad reach increased by 1.4 million users (+17.2%).
- Between October 2023 and January 2024, TikTok’s ad audience grew by 281,000 users (+3.0%).
SnapChat In Australia
Ad Reach and Audience
- Snapchat had 7.85 million users in early 2024, equivalent to 29.5% of the total population.
- Among the eligible audience (aged 13+), Snapchat’s ad reach was 34.9%.
- Snapchat’s ad reach represented 31.1% of the internet user base.
Demographics
53.0% of Snapchat’s ad audience was female, while 46.5% was male.
User Growth
- Snapchat’s ad reach increased by 150,000 users (+1.9%) between January 2023 and January 2024.
- There was no change in the ad audience size between October 2023 and January 2024.
Key Takeaways
- Snapchat reaches a smaller proportion of the Australian population compared to platforms like Instagram, TikTok, and YouTube, but it maintains a steady growth trajectory.
- The platform's audience leans slightly toward female users, similar to Instagram’s demographics.
- While its yearly growth is modest, its stable quarterly performance reflects a consistent user base.
X (Twitter) In Australia
Ad Reach and Audience
- X had 6.10 million users in early 2024, equivalent to 22.9% of the total population.
- Among the eligible audience (aged 13+), X’s ad reach was 27.1%.
- X’s ad reach represented 24.2% of the internet user base.
Demographics
- 32.5% of X’s ad audience was female, while 67.5% was male.
- Gender data is inferred and may include distortions due to "non-human" accounts and inferred gender signals.
User Growth
- Between January 2023 and January 2024, X’s ad reach increased by 847,000 users (+16.1%).
- Between October 2023 and January 2024, X’s ad audience grew by 547,000 users (+9.9%).
Key Takeaways
- X has one of the most male-dominated user demographics among major platforms, (this data may include inaccuracies due to considerations of binary gender only.)
- Despite modest total reach compared to other platforms, X has experienced significant growth, both yearly (+16.1%) and quarterly (+9.9%).
- These figures indicate that X’s ad audience grew faster than most other platforms in the Australian market over the past year.
Pinterest In Australia
Ad Reach and Audience
- Pinterest had 5.31 million users in early 2024, equivalent to 20.0% of the total population.
- Among the eligible audience (aged 13+), Pinterest’s ad reach was 23.6%.
- Pinterest’s ad reach represented 21.0% of the internet user base.
Demographics
- 71.8% of Pinterest’s ad audience was female, while 20.2% was male.
- Users of "unspecified" gender accounted for 8.0% of Pinterest’s ad audience.
User Growth
- Between January 2023 and January 2024, Pinterest’s ad reach increased by 1.9 million users (+54.0%).
- Between October 2023 and January 2024, Pinterest’s ad audience grew by 385,000 users (+7.8%).
Key Observations
- Pinterest has the highest concentration of female users among major platforms, with nearly three-fourths of its ad audience being female.
- The platform experienced significant yearly growth (+54.0%), outpacing most other platforms in the Australian market.
- A portion of the audience is categorized as "unspecified gender," which differentiates Pinterest’s demographic reporting from other platforms.
Engagement On Social Media
Big Commerce asked Aussies and Kiwis in a survey “When not actively making a product purchase, the most enjoyed resource from a brand or retailer” and based on the answers they concluded that contests and giveaways remain the most engaging content, outperforming podcasts and lifestyle posts
4. What are Ecommerce Sellers Doing To Adopt To Change?
- Only 33% of businesses currently use AI for operations.
- Augmented reality (AR) and AI are expected to redefine the eCommerce landscape by 2030 with more and more brands using them for product demonstration.
- 60% of businesses report improved customer engagement through omnichannel strategies.
- 90% of online-only businesses are considering physical pop-ups in the next two years.
- 43% of retailers raised free shipping thresholds due to rising costs.
Future Outlook
Predicted $50 billion boost in consumer spending power by FY2025 due to tax cuts and income growth. The eCommerce market is expected to grow at a CAGR of 8.33%, reaching $49.47 billion by 2028.
Data Sources
The data in this article has been curated from the following sources.
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