$10 Billion Australian Online Retail Market
Still small, but growing rapidly and attracting international retailers.
The National Australia Bank (NAB) this week released its latest report on the state of the Australian online retail market.
It makes for interesting reading.
Despite the howls of some in the bricks and mortar sector last year, online shopping is not robbing its offline cousins, nor are the bulk of purchases being made overseas.
According to the NAB Online Retail Sales Index - In depth report: January 2010 – January 2012, online retail accounted for only 4.9% of the total Australian retail spend of $216 billion
That equates to a very healthy $10.5 billion online market.
Online Sales Growth Booming
In fact the report goes on to highlight just how strong the growth in online retail (29%) is compared to offline (2.5%).
Like a lot of things in Australia a t the moment, it represents another two speed economy. One where things are booming and experiencing phenomenal growth, the other languishing and barely making any headway for the year.
While the woes of the Australian bricks and mortar retail sector have been debated all year in other media, what the NAB report clearly shows is that the online sector is happening.
This virtual pot of gold has not gone unnoticed by international companies, most notably from the US and UK.
And the Overseas Boys Have Noticed
Overseas brands grew their Australian online revenue by 40% last year, twice as much as the Australian online retailers at 20%.
This may be due to a combination of factors from the high Aussie dollar to many goods simply not being available in Australia.
In any event, overseas retailers have made it very clear that they intend to target the Australian online shopper.
But Oz Retailers Still Have the Larger Market Share
Thaty being said, domestic online stores still account for 75% of the online market. Although the international companies have a healthy 25% slice of the local fruit basket.
Retail Sector Breakdown
Fashion, cosmetics, department stores and online auctions made up the largest sector of the local Australian market at 47%.
Followed by the recreation sector of books, toys, movies, music and games at 20%.
Also with 20% was the home furniture, appliances and electronics sector.
Groceries, liquor and food rounded out the market at 13%.
Online Shopping by Age Group
Perhaps the biggest surprise was how evenly the revenue was split across the different age sectors.
Although if you take an alternative view, 75% of the retail spend was made by the people over 30.
This once highlights again the mistaken belief that online shopping is dominated by the young. It also highlights the danger of designing online marketing and shopping experiences for one age group. Clearly any strategy must cater for all age groups.
There are plenty of other interesting stats in the report, including State breakdowns. You can download the report here:
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