Coronavirus driving change
The coronavirus pandemic not only changed how businesses engage with customers but also reshaped the purchasing behavior of consumers. In the first half of 2020, Australia saw a huge increase in online sales of groceries, liquor, and food delivery, largely driven by panic buying of essentials. The pandemic has since progressed over multiple years and along with new waves of infections, restrictions, and lockdowns came further fluctuations in online shopping behavior.
The big winners of the increase in online spending in Australia were predominately food delivery services and established e-commerce businesses like Amazon and major retailers like Kmart, Woolworths, and Chemist Warehouse. In particular, Amazon Australia saw a significant increase in downloads of its mobile app. The influx of online shopping in 2020 allowed the e-commerce giant to almost match the monthly number of downloads it acquired when it was first established in Australia in late 2017. Conversely, the eBay app experienced a decline in downloads after an initial spike around the middle of 2020.
When ordering food, another international tech company, Uber Eats, has kept its place as Australia’s preferred food delivery service, while its competitor Menulog has maintained popularity following the spike in consumer spending on food delivery services experienced in the early months of the pandemic, reaching levels more than four times the average before coronavirus took hold. Although the peaks in food delivery spending were most prominent during lockdown periods, it appears that Australians are continuing to order food online more than previously.
Cash fast becoming obsolete
The plethora of digital payment methods are fast replacing cash, with credit card payment topping the ranks of leading digital payment methods offered by businesses in Australia, followed by debit cards, PayPal, and bank transfer. These are relevant not only online but in stores as well, with concepts like click and collect allowing customers to purchase online before picking up the item in-store. Digital wallets like Apple Pay and Google Pay, and buy now, pay later (BNPL) services like Afterpay and Zip Pay are also popular online payment offerings in the country.
Australia has been no exception to the worldwide boom of e-commerce during the coronavirus pandemic. Even as regular retail returns to normal, Australian consumers have shown no sign of slowing down. This appetite for more points to significant room for growth in the domestic Australian e-commerce market, where even newcomers can find a niche alongside the major retailers who have already established themselves online.