From 0 to hero – Australia, New Zealand e-commerce growth overtakes the world in 2020
It’s official – e-commerce has seen exponential growth over the past year as people shopped online more than they went outdoors, but no region recorded as much growth as Australia and New Zealand did.
The Oceanic region had been sluggish for e-commerce growth in years past, but it appears the unique circumstances of 2020 have accelerated online retail adoption not only in flourishing territories like China and Southeast Asia, but down South as well. Multiple reports including Salesforce’s Holiday Insights Hub and the 2020 Holiday Predictions report have named Australia and New Zealand as having the highest growth globally.
The two neighbors showed a 108% spike in Q2 of 2020, followed by a 107% hike in the third quarter of the year. Despite the slight decrease in online traffic from Q2 to Q3, the numbers are still astronomical in comparison with the same periods from last year.
The Salesforce report also documented how retailers across Australia and New Zealand are seeing meteoric year-on-year growth in revenue, online traffic, and order size. But average spending by Australia / New Zealand (A/NZ) customers decreased slightly between Q2 and Q3 last year to US$3.17 from US$3.41 – despite a worldwide increase in shopping expenditure of more than 16%.
Regardless, the outstanding growth is mirrored in the recent eCommerce Industry Report by Australia Post, which saw a flurry of online activity setting record digital buying volumes, with Australians spending an “incredible AU$50.46 billion online over the year” of 2020, dwarfing the AU$32.1 billion e-commerce spending from 2019. Excluding dining-out and food-related expenditure, online buying accounted for 16.3% of all retail spending in 2020 – the biggest such shift in Australian spending habits, ever.
Australia Post General Manager Parcel and Express Services, Ben Franzi, said that last year’s major migration was the result of the pandemic and Australians subsequently spending more time at home – leading to e-commerce becoming an essential shopping channel in the country for the first time ever.
Meanwhile, the latest This Year, Next Year: E-Commerce Forecast Report from GroupM reported that substantially quicker e-commerce takeup during the first half of 2020, led to healthy and significantly raised sales in Australia throughout the second half of the year.
The media agency outlined in the report that packaged goods manufacturers were some of the big winners of this accelerated shift to online commerce last year, as their products transitioned from being bought in-store to being purchased virtually and resulting in a whopping 277% increase in e-commerce channel sales in 2020.
GroupM’s projections are forecasting that based on these figures, nearly US$7 trillion in e-commerce sales is expected by 2024, representing a quarter of all retail sales at the time. “While we can see penetration is currently lower on this comparable measure, with e-commerce making up 6.6% of retail sales in Australia, this means our market [along with Canada and Japan] will see even more rapid uptake over the next few years,” according to GroupM general manager of Commerce, Roger Dunn.
By mid-2020, 14% of the entire Australian retail market was being driven by e-commerce, a stark contrast to previous years. But with the expanding opportunities being presented by a healthy e-commerce culture, will come growing sets of challenges for brands, consumers, and suppliers.
“Locally, Amazon is rapidly expanding its network of fulfillment centers, as well as expanding its ecosystem of advertising solutions,” pointed out Dunn. “So along with the growth of businesses like Cartology and established platforms like eBay, Australia is set to have a vibrant and growing retail media ecosystem that brands will need to navigate in order to drive growth.”
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