Australia Post research highlights nation’s Covid-19-inspired $62bn online spree

A new report from Australia Post shows the attraction of online shopping helped fuel an unprecedented leap in e-commerce in 2021.

The pandemic and accompanying lockdowns elevated and accelerated the penetration of online shopping as part of the $350bn retail sector in Australia. Picture: Bloomberg

A potent combination of the weight of hundreds of billions of dollars in pent-up savings, Covid-19 lockdowns and the growing attraction of online shopping helped fuel an unprecedented leap in e-commerce last year, as more than 80 per cent of households bought something online in a $62bn national spending binge.

The pandemic and accompanying lockdowns elevated and accelerated the penetration of online shopping as part of the $350bn retail sector in Australia, bringing the country closer to global leaders are such as the US, Britain and richer pockets of Asia, but still lagging the pack, the 2022 Australia Post E-Commerce industry report has found.

Released on Tuesday, the report into the nation’s e-commerce industry and online shopping behaviour has found the online binge drove national year-on-year growth of 12.3 per cent and that, while growth was more subdued in comparison to 2020, it was at a level almost double the pre-pandemic baseline.

With their favourite stores closed, especially in the eastern states as lockdowns hit, and workers were forced to stay at home, Australians spent a record $62.3bn online for the year, with online accounting for 19.3 per cent of the total retail spend.

But there was a divergence in the shopping patterns among certain consumer cohorts as they reached for their laptops, smartphones or tablets to shop for food, clothing, sporting goods or entertainment to keep them fed, fit and entertained during the global pandemic.

The research conducted by Australia Post found that there were four distinct groups of online shoppers: occasional shoppers, active shoppers, very active shoppers and super shoppers.

Despite super shoppers accounting for just 1.4 million of the 9.2 million households buying online, they account for about half of all online purchases. By comparison, occasional shoppers and active shoppers represented more than half of all shoppers, but fewer than 20 per cent of purchase volume.

And while the rate of online shopping has moderated since the beginning of the year, reflecting the end of lockdowns, much of the new-found interest in online shopping will remain.

“We believe a lot of it will stick,” said Gary Star, Australia Post executive general manager, customer and commercial.

He said this was for two reasons: consumers felt more comfortable and safe shopping online, and many bricks-and-mortar retailers had invested in online and saw it as an important channel.

“And so as much as the bricks and mortar retailers want customers that come in store, they really are focused on a multiple channel offer, and they’re really driving hard with online, including click and collect, home delivery and various other means,” he said. “So consumers are changing behaviour, but retailers are investing heavily in the online channel. We are confident that it will continue to grow and therefore continue.”

However, the Australia Post e-commerce report finds that, despite the leaps and bounds Australian online shopping has taken since the pandemic began in early 2020, it is still trailing international leaders.

“While the growth over the last two years has been significant and brought Australia closer to where many of the global e-commerce leaders were pre-pandemic, we still lag not just in terms of online spend, but on other metrics such as purchase frequency too,” Australia Post chief executive Paul Graham said.

“For example, in South Korea more than half – 53 per cent – of all online shoppers are buying at least weekly on average, more than double Australia’s figure of 25 per cent.

“It means that there remains significant growth still to come for the Australian market.”

Australia outperforms other countries when it comes to the number of consumers shopping online at least once a month, but lags with high-frequency shoppers. In China, India and Indonesia, more than 45 per cent of consumers shop online at least once a week.

Mr Star said technology to some extent was holding Australian e-commerce back, but there were other “friction points”.

“As it gets more and more compelling and easier to shop online Australians are doing it more often,” he said.

Originally published as Australia Post research highlights nation’s Covid-19-inspired $62bn online spree