Inside Australian
Online Shopping
2019 eCommerce Industry Report

Home

Overview

FashionVarietyStoresAbout this report
This is the fourth edition of the Inside Australian
Online Shopping Industry Report; an in-depth study
into consumer online buying behaviour and trends.
The report has been prepared using 2017 and 2018 deliveries data
recorded by the Australia Post Group, unless otherwise stated.
Commentary in this report relating to online shopping is basedon an extrapolation of this data. Year on year growth numbers
are based on actual or extrapolated transaction volumes.
This edition also examines the trends of domestic andinternational frequent online shoppers. The cross-border analysis
is based on findings of a global survey conducted by International
Post Corporation.

Health &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Contents
Home

04

Foreword

54

Cross border

05

Executive summary64

The technology evolution

06

24

eCommerce overview

Overview

Fashion

Virtual assistants

65

Visual search

66

Augmented reality

67

Key consumer trends

08

Shopping is getting personal

68

What are Australians buying online?

18

The evolution of the chatbot

69

Who’s buying?

21

New ways to pay

70

72

Category overviews
Fashion24

Variety Stores

30

Health & Beauty

36

Homewares & Appliances

42

Hobbies & Recreational Goods

48

73

VarietyStoresHealth &BeautyHomewares& Appliances

Methodology
Hobbies &Recreational
Goods

References
Cross border74

Contacts
The technology
evolution

Foreword
Welcome to Australia Post’s Inside
Australian Online Shopping Reportfor 2019.
This report provides a comprehensive
analysis of the latest trends in online
buying behaviour, as well as insights intocross-border eCommerce and how technology
is fundamentally shifting the shopping habits
and expectations of Australians.
Almost three quarters of all Australianhouseholds are now shopping online andwe expect that around 12% of all consumer
spending will be conducted online by 2021.
Christine Holgate
Group Chief
Executive Officer& Managing Director
Australia Post

In 2018 alone, the number of online purchases grew by more than 13%
year on year in every State and Territory, with the national average growing
over 20%. While Australia’s major metro cities still dominate online purchasing,
there is also rapid growth in online shopping in regional areas. Even in remoteareas of Australia, it’s clear that the households that shop online are doing somore frequently and they are buying a wider variety of products.
With more people choosing to buy and sell online, we at Australia Post areconsistently setting new records for the amount of parcels we are delivering.
In 2018, Australia Post Group including StarTrack delivered more than 3.3 billion
items to more than 12 million addresses across the country.
From an international perspective, China is continuing to drive much of theoverseas demand for Australian goods. As the Chinese middle-class continues
to swell, Australian businesses are well positioned to capitalise on this booming
growth market because of our reputation for producing clean, safe andpremium-quality products.
This report again highlights the growing consumer expectation around rapid
or time-specific delivery options. It also points to the reassurance online
shoppers gain from having access to an easy and free returns service.

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Online retailers that offer speedy delivery and reliable returns are winningmarket share. For that reason, it’s absolutely vital that retailers work
hand-in-glove with their logistics partner to provide the kind of seamlessexperience today’s consumers expect.

Cross border

We hope this report helps Australian businesses to understand the changes
that are happening in the market; plan strategically for the future; and takeadvantage of the next wave of customer opportunities.
ForewordHome

The technology
evolution04

Executive summary
Australia is embracing eCommerce at
an accelerated rate, with online goods
spend reaching 10% of total retail atthe end of 2018, two years ahead of
our prediction.
Ben Franzi
General Manager,
Parcel & Express
Services/Intermediaries
Australia Post

The surge in eCommerce was largely driven by the popularity of sales events,
Marketplaces and innovative buy now, pay later (BNPL) payment options.
2018 was the year Australians fully embraced America’s Black Friday /Cyber Monday tradition, and is now the biggest week in our eCommerce
history. These events have shifted what is usually our peak Christmas
shopping period to November, with shoppers now expecting substantial
discounts during this time.

Overview

FashionMarketplaces are dominating the eCommerce market, as consumers hunt
for the best deals and the convenience of a one-stop-shop. The number ofMarketplace purchases grew by 31.2% year on year, indicating that more
sellers are turning to Marketplaces to broaden their customer base and growbrand awareness.

VarietyStoresHealth &BeautyBNPL continues to accelerate, particularly in the Fashion sector, which islargely driven by the younger demographic. The consumption rate is set
to increase, with more of this generation entering the workforce. As thispayment method continues to mature, we expect to see greater adoption
into other sectors.

Homewares& Appliances

Hobbies &Recreational
Goods

Retailers are also increasingly looking for ways to stand out from theircompetitors. Speed of service is being used as a competitive marketing tool
to convert more sales and retain loyalty. As more retailers provide faster
fulfilment and delivery, shoppers’ expectations will continue to grow.

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As the eCommerce landscape is constantly evolving, retailers must adopt
new ways to grow their market share. The future of eCommerce is aninterconnected physical and digital world, providing consumers with theability to purchase when, where and how they choose.
Executive summaryHome

The technology
evolution

05

Home

eCommerce overview
Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

More than 73% ofAustralian households
shopped online in 2018

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The technology
evolution

Overview

06

Home

Overview

FashionVarietyStoreseCommerce in Australia is growing rapidly, with online spend reaching
10% of total retail sales in 2018, taking its share to two percentage
points higher than the previous year1. Australians spent $27.5 billion
buying goods online, an increase of 24.4% year on year (YOY)2.
In comparison, total retail spend excluding
cafes, restaurants and takeaway foodservices, recorded a modest 3% growth toreach $275.3 billion3.
When it comes to the number of purchases
made online, purchases were up 20.2%,
one percentage point higher than in 2017.
While every month experienced double-digit
growth, the first and last quarters grew
above the national average.

More than 73% of Australian households
shopped online in 2018. Given the strong
up-take to shop online, we predict that
eCommerce penetration will reach 12% ofretail spend within the next three years.
According to our consumer research,
shoppers plan to continue or increase
their online spend in 2019.

Health &BeautyHomewares& Appliances

Retail spend$275.3B
Hobbies &Recreational
Goods

Online goods spend$27.5B

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10

total
% of
retail spend

The technology
evolution

Overview

07

Key consumer trends
2018 was the ‘year of the sale’,with online sales events driving a
spike in eCommerce growth. We
also saw the continued rise of BNPL
usage, Marketplace and mobile
shopping, and a growing demandfor express delivery.

Home

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

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The technology
evolution

Overview

08Year of the sale
The five weeks from 11
November to 15 December
accounted for almost
15% of all eCommercetransactions. The peakfor this period was Black
Friday / Cyber Monday,
which was the biggest
online shopping week
in Australia’s history,
recording strong growthof over 28% YOY.

Number of purchases
Home

SALE

SALE

SALE

SALE

SALE

Overview

FashionClick Frenzy
week

Lead up toBlack Friday

Black Friday /Cyber Monday
week

3 weeks prior
to Christmas

2 weeks prior
to Christmas
VarietyStoresYOY growth

13.6%

23.6%

28.7%

11–17
November

The week of Click
Frenzy was the second
largest shopping eventand the fifth largest
week by volume.

YOY growth

Online goods
purchases grew
13.6% YOY.
Variety Stores andFashion purchases
accounted for over
65% of the total, withalmost equal sharebetween them.

YOY growth

26.2%

Health &BeautyYOY growth

17%

18–24
November

25 November–01 December

02–08
December

09–15
December

Homewares& AppliancesThis was the fourthlargest week of theyear as it fell eitherside of the two largest
shopping events,
providing shoppers
with extended sales
promotions.

Black Friday was
the biggest week
for eCommercepurchases in Australia,
up 28.7% YOY.

As Black Friday sales
continued into thisweek, shoppers werestill grabbing a bargain
with purchases up
17% YOY.

As shoppers prepared
for Christmas, online
purchases spiked,
making this thesecond largest week,
up 26.2% YOY.

YOY growth

Purchases wereup 23.6% YOY.

This period also
includes the Cyber
Monday sales event.
Marketplaces
accounted for a fifthof all purchases,
growing by 41.2%
for this period.

YOY growthHobbies &Recreational
Goods

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Traditionally thiswas the number one
shopping period byvolume, however sales
events in the lead up
to this week in 2018shifted it to third place.

The technology
evolution

Overview09

In search of a bargain
More shopping mayhem in May
May Mayhem has taken this traditionallyquiet sales period to the 12th largest week
for online goods purchases, growing at
25.1% YOY. Nearly a third of the purchases
were Fashion related, growing by 29.4%
YOY. Health & Beauty recorded strong
growth during this week, at 50.7%.

Direct marketing triggers sales
As more and more retailers participate in sales events, capturing consumer
attention has never been more important. According to our consumer research4,
the most effective marketing channel was email, with 39% of shoppers reportingthat they heard about a promotion via this channel.

Home

Overview

Over 15% of respondents indicated that social media was the second most effective
channel, followed by web advertising at just 11%, which declined 46% YOY.

Fashion

Personally-addressed physical mail is also gaining popularity and has seen an
increase of 16.6% YOY. Personalised communication is now a vital part of capturingand maintaining shopper attention.

VarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

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The technology
evolution

Overview

10

The need for speed
Online shoppers increasingly expect faster service
and some savvy retailers are now offering quicker
fulfilment and shipment. This competitive edge
potentially helps retailers stand out and convert moresales. Next-day deliveries has grown by 31.7% andmore than 62% of these are Fashion related.
For instance, Cotton On
provides a $2 express service
for customers who meet aminimum spend amount. The
Iconic also provides a highly
competitive service wherecertain items are shipped
within three to five hours.

Home

Overview

FashionThe week before Christmas
was Australia’s peak week forexpress shipping, accounting
for nearly 32% of all deliveries
compared to an average of
19% across all other weeks.

VarietyStoresHealth &BeautyAs more retailers provide faster
service, shopper expectations
for time and day-specificdelivery will become the norm.

Homewares& Appliances

Hobbies &Recreational
Goods

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The technology
evolution

Overview

11

Seamless customer experience
It is becoming increasingly important to connect the physicaland digital shopping experience to create a seamless
environment for the consumer.

Home

Overview

Some retailers are providing
consumers with a more holistic
approach when purchasing theirproducts. Click and Collect brings
shoppers into a physical store,
which in turn promotes andencourages additional impulse
buying. Conversely, some retailers
provide in-store shoppers with theability to purchase from their online
store when a product is unavailable.

Alternatively, the consumer isprovided with a free shipping code to
make the purchase in their own time.

FashionSome online-only retailers are also
testing the market with pop-up stores
to increase their brand awareness.

VarietyStores

While the “phygital” customer
experience is still evolving, this holistic
approach to customer service is theway of the future.

The experience is enhanced withaccess to iPads or sales assistants
who can complete the transaction
on the spot.

Health &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

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The technology
evolution

Overview

12Buy now pay later
The adoption of BNPL continues to accelerate inAustralia. BNPL is an appealing option, as unlike
a credit card there is no service fee for customers
who pay on time.

Home

Overview

Millennials, those born after 1981 and who are 18+, are thefastest adopters of BNPL. These shoppers are more likely to befemale (78.7%) and of a younger demographic. They are alsofrequent online shoppers, with 86% purchasing at least monthly.

FashionVarietyStoresHealth &BeautyNumber of online payments

Hobbies &Recreational
Goods

%
48.8

6.7 %

24
.4

%

15.5%

Homewares& Appliances

Last year, Fashion purchases accounted for almost half (48.3%)
of all BNPL purchases.

BNPL
Debit Card
Credit Card
PayPalAfterpay is the most popular BNPL provider, recording $2.3 billion
in underlying sales through its platform in the second half of 2018.
Whilst BNPL is gaining popularity, PayPal is still the dominant
payment method used for eCommerce transactions, accounting
for 48.8% of online purchases4.
Overview

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The technology
evolution

13

Marketplaces are dominating
There are more players in the AustralianMarketplace than ever before.

Home

Newer entrants including Amazon, Catch Group and Myer,
have now been in operation for over 12 months. In the second
half of 2018, Catch Group reported that its gross transaction
values rose by 62%.

Overview

FashionLast year the number of purchases through Marketplaces
grew by 31.2% YOY, indicating that Marketplaces are still
dominating in Australia.

VarietyStoresSmaller retailers could take advantage of these platforms
to help build brand awareness and increase sales.

Health &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

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The technology
evolution

Overview

14

Shopping laterin the day
Browsing online using multiple
devices continues to shape theeCommerce world. However,more consumers are choosing
to complete a transaction via
their smartphones, up 28.8%, asix percentage point increase
from the previous year.
Furthermore, consumers are more
likely to be shopping later in the day,with 32% of purchases made between
7–10pm. 21% occurred between 2–5pm4.
Consumers now expect a seamlessand secure experience, regardless ofthe channel they are ordering from.

When purchases are made

32.2%

Home

20.6%
15.6%

Overview

11.8%

8.4%

7.3%

2.6%

1.5%

Early
morningMidmorning

Lunch
time

Afternoon

Early
eveningMideveningLateeveningAfter
midnight

6:00 to8:59am

9:00 to11:59am

12:00 to1:59pm

2:00 to4:59pm

5:00 to6:59pm

7:00 to9:59pm

10:00 to11:59pm

12:00 to5:59amFashionVarietyStoresHealth &BeautyHow purchases are madeDesktop

Homewares& Appliances

LaptopMobile

32.8

%

27.3%

Hobbies &Recreational
Goods

26.4%
28.8

-5.1

-11

YOY growth

YOY growth

YOY growth%%

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The technology
evolution

Overview

15

Empowering consumers to buy online
The top deterrent to online shopping is not having access tothe fit, feel and quality of a product. To minimise this barrier
and drive revenue, retailers need to ensure they provide auser-friendly returns policy.
According to our consumer survey, 29%
said it was too much effort to organisea return. Also, 34% indicated it was too
expensive to return a product4.

Wez Byett, CEO and Founder at
Princess Polly said,“To simplify the returns process, we
provide free returns to our customers
who choose to exchange items for astore credit. We also include a returns
label in every parcel. Customers do
return items more frequently but weare also acquiring new customers.
In the first three months of introducing
this policy, we noticed that orders
increased by nearly 10% and thereturn rate only increased by 2%.
This is a great outcome for us andour customers.”

Home

Return tips
Overview

Clear and up-front returns
policy with a reasonable
returns timeframe

Fashion

Perhaps consider
providing a store credit
instead of a refund

VarietyStoresProvide returns labelor access to labels

Health &BeautyUtilise packaging that canbe repurposed for returns

Homewares& Appliances

Provide convenientdrop-off locations

Consider providing
discounted or free postage

Hobbies &Recreational
Goods

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The technology
evolution

Overview

16

The rise of the conscious consumer
As consumers are more aware of social andenvironmental impacts, many are choosing topurchase from ethical companies that align totheir personal values.
Environmental impact
As the vast majority of parcels are delivered to the home,consumers are tasked with disposing of packaging. A
global survey found 60% of shoppers would like theireCommerce packaging to be sustainable, and 50% said
they would pay the equivalent of 15 cents if it was offered5.
In Australia, our research shows that 49% of online
shoppers would choose to buy products from businesses
that are taking action to reduce their impact on theenvironment. Impressively, over 50% said they would
choose to purchase from retailers that offset the carbon
emissions incurred from shipping4.

Home

Overview

As consumers become more ethically conscious,
it’s important for retailers to adopt ethical andsustainable business practices.

FashionVarietyStores60%

want parcels
with sustainable
packaging

50%

Health &Beautywould pay
15 cents forsustainable
packaging

Homewares& Appliances

Know your supply chain
There is growing awareness and need for transparency
around product origin and supply chain. Consumers
are increasingly aware of the use of underpaid labour,
especially in the fast-paced Fashion industry.

Hobbies &Recreational
Goods

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The technology
evolution

Overview

17What are Australians buying online?
Fashion continues to lead the way in number of online purchases. Variety Stores and Marketplaces also
continue to attract shoppers, providing a one-stop-shop experience for the purchase of a variety of items.
When it comes to categories to look out for, Specialty Food & Liquor experienced 11.6% YOY growth after flat
growth in the previous year. By far, the stand out in terms of growth is Health & Beauty, at almost 30% YOY.
Fashion continues to be themain category purchased
online, accounting for 27% ofpurchases. The category grewby 20.4% YOY, on par with thenational average. Activewear
had the strongest growth, up
37.5% YOY and Footwear grewby 23.8%.
BNPL remains the most popular
payment option, accounting for48.3% of all Fashion purchases4.
Retailers that were once
focused only on Fashion are
expanding their range to include
complementary products suchas Cosmetics and Homewares.

Variety Stores offer a
one-stop-shop for online
shopping. These include large
retailers, online Marketplaces
and low-cost / Discount Stores.
They accounted for 35.6% of all
online purchases and grew by
21.5% YOY. The most common
purchases from Variety Stores
last year were Fashion andConsumer Electronic items,
representing over 40% ofpurchases4. Baby Products
also grew strongly at 34% YOY.

Health & Beauty recorded
the strongest growth acrossall categories, up 29.4% YOY.
Beauty and Cosmetics madeup over half of these purchases
and grew 36.4%. Black Friday /Cyber Monday was the busiest
week for Beauty products andalso recorded strong growth,rising 54% YOY.
More and more players
are moving into the Beauty
category, with many Fashion
retailers now stocking
Cosmetic products.

Home

Overview

Homewares & Appliances
had another solid year, growing
11.7%. While this is below thenational average, when we add
in Homewares & Appliancespurchased through Variety
Stores, this category’s market
share almost doubles to 22.2%.
Over half the purchases in thiscategory are Homewares andConsumer Electronics, with bothgrowing more than 14% YOY.
Consumer Electronics were also
the highest spend per purchase,increasing 6.1% YOY4.

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

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The technology
evolution

Overview

18

Hobbies & Recreational
Goods cover a diverse rangeof products. Automotive Parts& Accessories, Sporting Goods
and Games & Toys make upover 60% of all purchases in thiscategory. Outdoor Goods
grew strongly, at 17.4%,
followed by Games & Toys
at 15.5%. Automotive Parts
grew more than 12% withaverage spend up 9.1% YOY,
making it the third highest
spend per transaction
for online goods4.

Media products are
predominantly Books (80% ofpurchases), but also include
Stationery and Prints. As
traditional and independent
book retailers enhance their
online presence, we can expect
the growth of 10.5% to continue.
It’s also encouraging to see theaverage spend on Books growby 4.7% YOY, ahead of CPI4.

Specialty Food & Liquor
includes Wine, Liquor and
Non-perishable Groceries. Aftera flat 2017, this category grew
11.6% YOY. Wine and Liquorpurchases accounted for over
70% of purchases and grew by
5.2% YOY. As craft breweries
and independent distillers havefound new channels for direct
sales, we expect this growth
to continue. Wine and Liquorpurchases are now the second
highest spend per transaction4.
Non-perishable Goods andOrganic Products in particularshowed the strongest growth,rising 28.8% on the back of new
dietary trends.

Home

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

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The technology
evolution

Overview

19Year on year growth by specialty retailers

Home

29.4%
Overview

21.5%

20.4%

20.2%

FashionNational average
YOY growth

11.7%

10.5%

8.5%

11.6

%

VarietyStoresHealth &BeautyHomewares& Appliances

VarietyStores

Fashion

Homewares &Appliances

Health &BeautyMedia

Hobbies &Recreational
Goods

Specialty
Food & Liquor

Hobbies &Recreational
Goods

Share of online purchases
Cross border

35.6%

27%

11.5%

8.4%

7.3%

6.7%

3.5%

Overview

The technology
evolution

20

Who’s buying?

20.2%

Top 12 buying locations by volume
Rank

Locality

Growth (%)

1

Point Cook, 3030

27.5

2

Toowoomba, 4350

21.1

National average
YOY growth

Overview

12
10

3

3

Mackay, 4740

20.5

4

Liverpool, 2170

22.4

5

Cranbourne, 3977

26.7

6

Gosford, 2250

21.8

7

Hoppers Crossing, 3029

21.8

8

Campbelltown, 2560

20.5

9

Bundaberg, 4670

20.2

10

Wyong, 2259

25.5

11

Rouse Hill, 2155

28.5

Above average growth12

Cairns, 4870

16.5

Lower than average growth

Point Cook in Melbourne’s West was thenumber one online shopping suburb inAustralia for the fourth year running,and continues to grow above thenational average. Point Cook residents
also increased their frequency of online
purchase above the national average,
indicating they are not only buying more
online, but also more often.

Home

4
9
2
8

Queensland

7

11

5

6

New South Wales

The top twelve buying locations are again
dominated by suburbs that have seen
an influx of young families, particularly
through residential developments in new
growth corridors such as Cranbourne in
Melbourne’s South-East and Hoppers
Crossing in the West.

FashionVarietyStores1

Victoria

Health &BeautyHomewares& Appliances

Point Cook, Toowoomba and Liverpool aremajor centres, with populations above one
hundred thousand6. In contrast, Wyong
and Rouse Hill have smaller populations
but their residents were amongst the mostfrequent online shoppers, with over 77% ofhouseholds shopping online.

Overview

21

Hobbies &Recreational
Goods

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The technology
evolution

State and Territory
In every State and Territory, the number of online purchases grew
more than 13% YOY and the stand-out performers were Tasmania,
Victoria and Queensland. Although Tasmania represents just 2.5%of online goods purchases, the State recorded growth of almost
four percentage points above the national average. In 2018, over
74% of households in Tasmania shopped online.

Home

Overview

FashionOnline shopping frequency increased 9.4% across Australia in
2018. With Tasmania, New South Wales and the Australian Capital
Territory making the most frequent purchases per household.

VarietyStoresHealth &BeautyOnline shopping growth

Homewares& Appliances

20.2%
National average
YOY growth

Tasmania

23.9%

Victoria

22.2%

Queensland
%

21

South
Australia

20.9%

New South
Wales
%

19.3

Western
Australia

16.6%

Australian
CapitalTerritory%

16.3

Hobbies &Recreational
Goods

Cross borderNorthern
Territory

13.7%
Overview

The technology
evolution22

Major cities and regional Australia
Inner-regional areas such as Toowoomba and Ballarat experienced
the highest growth in online goods purchases, at 21.4% YOY. Major
cities still dominate, with 70% of goods purchased online andgrowing in line with the national average.

Home

Overview

Households in remote and very remote Australia that do shop
online are doing so more frequently. The rate of purchase is 1.2
times the national average. It is likely households in remote regions
depend on online shopping to access a wider range of products,
given the distance to their nearest shopping centre.

FashionVarietyStoresHealth &Beauty20.2%

Online shopping growth

Homewares& Appliances

National average
YOY growthHobbies &Recreational
Goods

20

%

Major cities of Australia

21.4%

Inner regional Australia

Cross border

19.7

%

Outer regional Australia
Remote Australia
Very remote Australia

16.3%

The technology
evolution

15.1%
Overview

23

Home

Industry overview

FashionOverview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

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The technology
evolution

Fashion24

Overview
Fashion purchases are growing from strength tostrength, achieving double-digit growth for theseventh consecutive year. In 2018, the number ofFashion related items grew by 20.4% YOY, staying
ahead of the national average.

Home

Overview

Online Fashion retail purchases represented 27% of all
eCommerce purchases. When Fashion purchases are
combined with Variety Store Fashion purchases, this market
share increased to an impressive 35.2%4.

FashionVarietyStoresAlmost half of BNPL purchases are Fashion related, indicating
this payment option now plays an important role in thecompetitive Fashion retail market.

Health &BeautyHomewares& Appliances

Share of online purchases

YOY growth

27%

20.2%

Fashion35.2%

Hobbies &Recreational
Goods

National online
average

8.2%

Cross border

Variety Stores2018 YOY growth

20.4%
The technology
evolution

Fashion25

Digging deeper
While Activewear makes up a small share of
Fashion purchases, it was the fastest growing
category in 2018, growing 37.5% YOY. Women’s
Fashion has continued to perform strongly,
growing 22.6% nationally and accounted
for 28.6% of Fashion purchases.

Home

Overview

FashionHowever, Women’s Fashion has been overtaken in termsof growth by both Men’s Fashion and Footwear, growing
by 24.9% YOY and 23.8% YOY respectively.

VarietyStoresHealth &BeautyFashion highlights
Biggest contributor

Strong performer

Highest growth

UnisexBrands%

Women’s
Fashion%Activewear(Share)(Share)

(YOY)

55.8

28.6

Homewares& Appliances

37.5%

Hobbies &Recreational
Goods

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The technology
evolution

Fashion26

State and regional growth
In total, 73.9% of online Fashion purchases weremade in metro areas. However purchases in inner
regional areas are growing faster than the national
average for Fashion, at 22.3% YOY.
Almost 80% of eCommerce Fashion purchases were made in justthree States: New South Wales with 36.4% of purchases, Victoria
with 26% and Queensland with 17.2%.
Queensland had the highest year on year growth of all States at
22%, particularly purchases of Activewear which grew 43.6% YOY,
and Footwear which grew 28.2% YOY. South Australia was thefastest growing State for Fashion purchases in 2017, but its
growth of 20.1% YOY in 2018 was just below the national average.

20.4%

Regional growth

Fashion average
YOY growth
Overview

20.3%

Major cities of Australia

22.3%

Inner regional Australia

Fashion19%

Outer regional Australia

13.3%

Remote Australia
Very remote Australia

VarietyStores10.5%
Health &BeautyState and Territory growth

20.4%
Fashion average
YOY growth

Queensland%

22.2

Tasmania%

21.7

Victoria

21.4%

New South
Wales
%

20.4

Home

South
Australia

20.1%

Australian
CapitalTerritory%

19.6

Homewares& Appliances

Hobbies &Recreational
Goods

Cross borderWestern
Australia

14.8%

Northern
Territory

11.1%
Fashion

The technology
evolution27

Who’s buying?

20.4%

Top 12 buying locations by volume
Rank

Locality

Growth (%)

1

Point Cook, 3030

25.6

2

Liverpool, 2170

23.5

3

Toowoomba, 4350

25.7

4

Cranbourne, 3977

27.9

5

Rouse Hill, 2155

26.3

6

Mackay, 4740

25.6

7

Hoppers Crossing, 3029

27.6

8

Campbelltown, 2560

23.1

9

Grovedale, 3216

21.8

10

Gosford, 2250

25.5

11

Ballarat, 3350

19.1

12

Craigieburn, 3064

35.7

Point Cook in Victoria’s Southwest has
knocked Liverpool in New South Wales fromthe top spot and is now the top location for
online Fashion purchases in Australia. Witha large population and limited access tolarge shopping hubs, Point Cook has above
average household engagement. Liverpool
however, had above average purchasefrequency, meaning those households who
were buying Fashion goods online did somore often.

Fashion average
YOY growth

Home

1

6

Overview

4

2

7

5

9

Fashion11

VarietyStores

3

10
8

12

Queensland

New South Wales

Victoria

Health &BeautyAbove average growth
Lower than average growthWith only half the population of the top
two suburbs, Rouse Hill in Sydney entered
the top 12 for the first time. This is due toa high household engagement and highpurchasing frequency, resulting in morehouseholds buying more often.
In contrast to Rouse Hill, Hoppers Crossingin Victoria had low household engagement
and low buying frequency. Despite this, wepredict Hoppers Crossing will continue toHomewares& Appliances

grow, given household engagement is still
low and population growth is high, 3.4 times
higher than the national average. Hoppers
Crossing also has a younger population,with a median age of 31 compared to thenational median age of 386. Craigieburnin Melbourne’s North was also a standout
suburb, that grew 35.7% YOY. This was 7.8
percentage points higher than the next
fastest growing suburb of Cranbourne, alsoin Melbourne.
Fashion28

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Key trends
November is peak Fashion month.

Busiest months

Fashion continues to lead the way in number of online
purchases. This is the second consecutive year that November
was the largest month, which peaked during the Black Friday /Cyber Monday sales events. There was also a significant growth
two weeks prior to and two weeks after these events. What
made Fashion different to most other categories was purchases
were strongest during the lead up to Black Friday / Cyber
Monday, with the second busiest week being Click Frenzy. For
all other categories, the second busiest week was two or three
weeks prior to Christmas.

1st

The strong performance of this period in November accounted
for 9% of all Fashion purchases in 2018. A surprising trend in
December was the final week before Christmas, which hadstrong growth of 36.7% YOY. This demonstrated a surge in lastminute purchases before the holiday. Due to this strong growth
and the large volume in the first two weeks of the month,
December was the second largest month for Fashion purchases.

Home

2nd
Overview

November

December

16.7%

19.7%

YOY growth

YOY growth

FashionVarietyStoresBusiest weeks
Busiestweek

2 busiestweek
ndHealth &Beauty3 busiest
weekrdBlack Friday /Cyber Monday

Click Frenzy
Week

Lead up toBlack Friday

18.2%

16.6%

16.7%

YOY growth

YOY growth

Homewares& Appliances

YOY growthHobbies &Recreational
Goods

Cross border

The technology
evolution

Fashion29

Home

Industry overview

Variety Stores

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Variety Stores

30

Overview
Variety Stores and Marketplaces continue toattract shoppers, accounting for 35.6% of all
Australian eCommerce purchases in 2018.

Home

Overview

This diverse group includes sellers offering a variety ofgoods including Clothing, Baby Products, Homewares
and Electronics. They also include popular one-stop-shop
Marketplace platforms, and online channels for traditional
Department Stores and Discount Stores. Variety Stores
experienced the second highest growth by category,after Health & Beauty, and grew 21.5% YOY.

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Share of online purchases

YOY growth

10.7%

20.2%

Homewares & Appliances

35.6

%

8.2%

National online
average

Fashion

2.6%

Health & Beauty

14.1%

Hobbies &Recreational
Goods

2018 YOY growth

Cross border

21.5%
The technology
evolution

Other

Variety Stores

31

Digging deeper
The most common purchases from Variety
Stores last year were Fashion and Consumer
Electronics, representing over 40% of purchases.

Home

Overview

Marketplaces, which provide a platform for third-parties
to sell their products directly to consumers, accounted formore than half of all Variety Store purchases. After surging
in 2017, YOY growth has slowed somewhat, but remains
well above the average at 31.2%.

FashionVarietyStoresMajor and Discount Stores grew 38.2% YOY, the fastest
ahead of the average category growth. This is a vast
improvement compared to 2017, where the growth was
almost flat year on year. Although they did not accountfor a large share of purchase volume, we also saw Baby
Product retailers grow by 34.3% YOY.

Health &BeautyHomewares& Appliances

Variety Stores highlights
BiggestchannelMarketplaces

56.4%(Share)Highest growthchannelUp andcomingMajor andDiscount Stores

Baby
Products

(YOY)

(YOY)

38.2%

Hobbies &Recreational
Goods

Cross border

34.3%

The technology
evolution

Variety Stores

32

State and regional growth
Tasmania had the strongest YOY growth at 29.9%, 8.5 percentage points
ahead of the national growth of Variety Stores. This was followed by
Queensland, Western Australia and Victoria, which also had above average
growth. The Eastern States accounted for 77.8% of all Variety Store purchases.

21.5%

Regional growth

Variety Storesaverage YOY
growthOverview

20.7%

Major cities of Australia

Western Australia and Queensland have been increasingly turning toMarketplaces for their purchases, with purchases growing by over 35%
YOY in both States, well above the national Marketplace average.

23.3%

Inner regional Australia

Metro areas made up over two thirds of all Variety Store purchases. However
regional areas have been picking up the pace with purchases growing
23.3% YOY in inner regional Australia, and an even higher 23.6% YOY in outerregional Australia. This is in comparison to 20.7% growth YOY for metro areas,highlighting the overall impact of regional shoppers.

Home

Fashion

23.6%

Outer regional Australia
Remote Australia

21.3%

Very remote Australia

18.6%

VarietyStoresHealth &BeautyState and Territory growth
Homewares& Appliances

21.5%
Variety Stores average YOY growth

Tasmania%

29.9

Queensland%

24.2

Western
Australia

22.8%

Victoria

22.2%

South
Australia

21.9%

New South
Wales
%

18.8

Northern
Territory

15.7%

Australian
CapitalTerritory%

Cross border

12.8

Variety Stores

Hobbies &RecreationalGoods

The technology
evolution

33

Who’s buying?

21.5%

Top 10 buying locations by volume
Rank

Locality

Growth (%)

1

Point Cook, 3030

26

2

Liverpool, 2170

21.1

3

Toowoomba, 4350

22.2

4

Hoppers Crossing, 3029

27.3

5

Cranbourne, 3977

32.3

6

Campbelltown, 2560

21.9

7

Gosford, 2250

24.6

8

Bundaberg, 4670

22.8

9

Mackay, 4740

20.7

10

Wyong, 2259

27.7

Variety Storesaverage YOY growthHome

Overview

9
9

10

1

2

Fashion

4

8
3

7
6

Queensland

New South Wales

VarietyStores5

Victoria

Health &BeautyAbove average growth
Lower than average growth

The top three suburbs for Variety Store
purchases remained unchanged from 2017,with Point Cook, Liverpool and Toowoomba
keeping their positions. Despite its large
population, Toowoomba had below
average household engagement andpurchase frequency.

Sitting in number 10 for the second year
in a row, the New South Wales suburbof Wyong showed well above average
household engagement and purchasefrequency with the latter increasing
70% above the national growth rate.
Cranbourne in Melbourne’s Southeast
is a location to watch, recording above
average household engagement. Although
the average purchasing frequency is low,
this is starting to increase.

Homewares& Appliances

Cranbourne also experienced significant
population growth between the lasttwo censuses, 3.6 times higher than thenational average6. Due to the frequencyof purchases and its population growth,
we predict Variety Store purchases in
Cranbourne will continue to grow in 2019.

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Variety Stores

34

Key trends
Bucking the trend with a seasonal peakin December.
Almost a quarter of purchases from Variety Stores were madein the last two months of 2018, indicating Christmas shoppers
still depend on Variety Stores as a one-stop-shop for theirholiday purchases. Starting with Click Frenzy in November,
Variety Store sales steadily increased through Black Friday /Cyber Monday into the second week of December, when theyreached their annual peak.
This is a different story to all other categories, which peaked
during the Black Friday / Cyber Monday week and purchases
slowed towards Christmas. The continued growth in purchases
after Black Friday / Cyber Monday reinforces that shoppers
heavily depend on Variety Stores for Christmas shopping.
Marketplaces were the main online sales channel in Variety
Stores and largely contributed to the year on year growth in
this category, with 42 out of 52 weeks of the year having above
average growth.

Busiest months

1st

Home

2nd
Overview

November

December

22%

25%

YOY growth

YOY growth

FashionVarietyStoresBusiest weeks
Busiestweek
2 weeks prior
to Christmas

55.9%

YOY growth

2nd busiest
week
3 weeks prior
to Christmas

23.5%

YOY growth

Health &Beauty3rd busiest
weekBlack Friday /Cyber Monday

Homewares& Appliances

31.8%
YOY growthHobbies &Recreational
Goods

Throughout the year, Marketplaces accounted for between
47.6% and 62.7% of Variety Store purchases each week. The
peak occurred during the final week of the End of Financial
Year Sales. This week saw a 107.9% increase in Marketplacepurchases YOY, more than double the rate of overall Variety
Stores growth for the same period. It’s possible this was due tochanges in GST legislation, which took effect from July 1 2018
and saw a rush of Marketplace purchases before this date.

Cross border

The technology
evolution

Variety Stores

35

Home

Industry overview

Health & Beauty

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Health & Beauty36

Overview
Online purchases of Health & Beauty products boomed in2018, growing faster than any other category at 29.4% YOY.

Home

This was the fourth consecutive year of double-digit growth for thiscategory. Health & Beauty represented 8.4% of all eCommerce purchases.
When combined with Health & Beauty purchases from Variety Stores, thecategory’s overall share increased to 11%.

Overview

FashionAs the name suggests, Health & Beauty comprises two distinct purchasetypes. Health purchases include Vitamins, Supplements and Pharmaceutical
Goods, which tend to be purchased by consumers on a more frequent
replenishment cycle. Beauty purchases are predominantly Cosmetics andare typically purchased more impulsively by younger consumers.

VarietyStoresHealth &BeautyHealth & Beauty shoppers increasingly prefer to split their payments, with
11.6% of BNPL purchases attributed to this category. Cosmetic and Beauty
Goods accounted for 70% of these Health & Beauty BNPL transactions4.

Share of online purchases

Homewares& Appliances

YOY growth

8.4%

20.2%

Health & Beauty

2.6%

11%

Hobbies &Recreational
Goods

National online
average

Variety Stores2018 YOY growth

Cross border

29.4%
The technology
evolution

Health & Beauty

37

Digging deeper
Beauty products had a standout year in 2018with 36.4% YOY growth, representing 54.6% of
Health & Beauty purchases. This was the second
highest growth category for the year behind
Activewear and was largely driven by sales
events. Health purchases also showed strong
growth, up 21.8% YOY, which accounted for 45.4%
of Health & Beauty purchases. These strong
performances were the driving factor in thisindustry’s eCommerce growth in 2018.

Home

Overview

FashionVarietyStoresHealth &BeautyHealth & Beauty highlights
Biggestcontributor

Strongperformer

Beauty%Health(Share)(Share)54.6

Homewares& Appliances

45.4%

Hobbies &Recreational
Goods

Cross border

36.4%

YOY growth

21.8%

YOY growth

The technology
evolution

Health & Beauty

38

State and regional growth
Major cities grew the fastest of all regions in Australia,
growing 31.1% YOY in 2018. This region also accounted
for 70.9% of Health & Beauty purchases. Inner regional
Australia was the next fastest, up 27.6% YOY.

29.4

Regional growth%

Health & Beauty
average YOY
growth

27.6%

Inner regional Australia

Fashion

22.4%

Outer regional Australia

VarietyStores

20.5%

Remote Australia
Very remote Australia

11%
Health &BeautyHomewares& AppliancesState and Territory growth

29.4%
Health & Beauty
average YOY growthVictoria

32.6%

South
Australia

31.1%

Overview

31.1%

Major cities of Australia

New South Wales, Victoria and Queensland accounted
for 77% of all Health & Beauty purchases. Purchases in
Tasmania grew 30.9% YOY, above the national average,
suggesting that shoppers in this State seek a broader
product selection online than what is available locally.
After below average growth in 2017, South Australia’s
Health & Beauty purchases rose 31.1%, while growth inQueensland went the opposite way, and slowed after
above average growth in 2017.

Home

Tasmania%

30.9

Australian
CapitalTerritory%

30.6

Hobbies &Recreational
Goods

Cross border

New South
Wales
%

29.6

Queensland%

28.5

Western
Australia

22.2%

Northern
Territory

18.7%

Health & Beauty

The technology
evolution

39

Who’s buying?

29.4%

Top 10 buying locations by volume
Rank

Locality

Growth (%)

1

Toowoomba, 4350

25.3

2

Point Cook, 3030

33.7

3

MacKay, 4740

23.1

4

Upper Coomera, 4209

40.6

5

Mandurah, 6210

14.3

6

Cranbourne, 3977

37.7

7

Bundaberg, 4670

27.2

8

Liverpool, 2170

31.5

9

Gosford, 2250

27.8

10

Hoppers Crossing, 3029

-13.1

Health & Beauty
average YOY growthHome

Overview

2

3
7

Fashion

8

6
10

1

Queensland

5

9

4

New South Wales

Victoria

VarietyStoresWestern
Australia

Health &BeautyAbove average growth
Lower than average growth

Located in the growth corridor between theGold Coast and Brisbane, Upper Coomera
debuted in the top 10 Health & Beauty
suburbs, growing at 40.6% YOY.

frequency. We predict it will continue togrow, given its population growth is 4.5
times higher than the national averageand it has a younger demographic profile6.

Having only one third to half the populationcompared to the other top 10 suburbs,
Upper Coomera had above average
household engagement and purchase

Bundaberg in Queensland is anothernew entrant to the top 10 list due to its
high purchase frequency. Its household
engagement is still low but is set to grow.

Homewares& Appliances

With below average household
engagement and below average purchasefrequency, Toowoomba and Hoppers
Crossing achieved high eCommercepurchases in Health & Beauty. Their highrankings were mainly driven by theirlarge populations.

Health & Beauty

40

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Key trends
Stunning spikes for sales events.

Busiest months

November was the stand out month for Health & Beautypurchases in 2018, growing a whopping 40.1% YOY andaccounting for 11% of purchases for the year. December was
close behind, with 32.3% growth in purchases and a total of
10% of purchases.

1st

Sales events largely stimulated this significant growth, with somesales weeks having the strongest Health & Beauty growth of theyear. For example, Black Friday / Cyber Monday week was thenumber one week for Health & Beauty volume, surging 53.5%
YOY. Whilst not the largest month for the year, the May Mayhem
sale also grew more than 50% YOY which was well above theaverage Health & Beauty growth of 29.4% in 2018.

Home

2nd
Overview

November

December

40.1%

32.2%

YOY growth

YOY growth

FashionVarietyStoresBusiest weeks
Busiestweek

2nd busiest
weekBlack Friday /Cyber Monday

53.5

%

YOY growth

2 weeks prior
to Christmas

32.4

%

YOY growth

Health &Beauty3rd busiest
week
Lead Up toBlack Friday

Homewares& Appliances

63.3

%

YOY growthHobbies &Recreational
Goods

Cross border

The technology
evolution

Health & Beauty

41

Home

Industry overview

Homewares & Appliances

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Homewares & Appliances

42OverviewGrowth in online Homewares & Appliances continued
to slowly increase in 2018, albeit below the national
average at 11.7% YOY. It still accounted for the thirdlargest number of purchases in 2018.

Home

Overview

Additionally, almost one in three purchases from Variety Stores
were related to Homewares & Appliances, up from one in fourpurchases in 2017. If these purchases are included, the shareof online Homewares & Appliances purchases almost doubles
to 22.2%. This reinforces that shoppers are taking advantage ofthe multitude of channels they can purchase these goods from.

FashionVarietyStoresBNPL is an increasingly popular payment option for Homewares& Appliances, with 16.4% of BNPL purchases attributed to items
from this category. When broken down further, 44% of these
BNPL purchases are related to Homewares and 36% areConsumer Electronics4.
Share of online purchases

Health &BeautyHomewares& Appliances

YOY growthHobbies &Recreational
Goods

11.5%

20.2%

Homewares & Appliances

22.2

%

National online
average

10.7%

Variety Stores2018 YOY growth

Cross border

11.7%
The technology
evolution

Homewares & Appliances43

Digging deeper
Homewares captured the highest share in thiscategory, with 37.3% of purchases, and achieved
above average growth of 15.8% YOY.

Home

Overview

It was closely followed by Consumer Electronics, with a 24.7%
share, growing 14.5% YOY. Online purchases of Tools, while a
relatively small sub-category, also grew strongly at 12.6%. As
major retailers continue to invest in online platforms for selling
Hardware this will be an area to watch.

FashionVarietyStoresThe next up-and-coming sector to watch is the Pet category.
Purchases of Pet Products accounted for 10.2% of Homewares& Appliances in 2018.

Health &BeautyHomewares & Appliances highlights
Top
performer

Homewares

37.3%(Share)StronggrowthConsumerElectronics%

24.7(Share)Homewares& Appliances

Up andcomingPet
Products%

Hobbies &Recreational
Goods

10.2
(Share)Cross border

15.8%

YOY growth

14.5%

The technology
evolution

YOY growth

Homewares & Appliances

44

State and regional growthVictoria was again the fastest growing State forHomewares & Appliances in 2018, up 14.4% YOY. Following
closely behind was Tasmania, growing 13.7% YOY. The
Australian Capital Territory also grew at an above averagerate of 12.4% YOY. Despite on par growth in New South
Wales and below average growth in Queensland, thesetwo States combined with Victoria account for almost 80%
of all Homewares & Appliance purchases in Australia.

11.7%

Regional growth

Major cities accounted for two thirds of purchases in 2018, and was
the fastest growing region at 12.8% YOY. Inner regional areas grew ata modest 10.4%, 1.3 percentage points below the national average.

Home

Homewares & Appliances
average YOY growth
Overview

12.8%

Major cities of Australia

10.4%

Inner regional Australia

FashionOuter regional Australia
Remote Australia
Very remote Australia

8.5%

7.3%

VarietyStores8.8%
Health &BeautyState and Territory growth

11.7%
Homewares & Appliances
average YOY growthVictoria

14.4%

Tasmania%

13.7

Australian
CapitalTerritory%

12.4

Homewares& Appliances

Hobbies &Recreational
Goods

Cross border

South
Australia%

12

New South
Wales
%

11.8

Queensland%

10.5

Western
Australia%

6.7

Northern
Territory%

5.9

Homewares & Appliances

The technology
evolution

45

Who’s buying?

11.7%

Top 11 buying locations by volume
Rank

Locality

Growth (%)

1

Point Cook, 3030

32

2

Toowoomba, 4350

7.7

3

Mackay, 4740

12.1

4

Gosford, 2250

9.2

5Bundaberg, 4670

-0.1

6

Cranbourne, 3977

18.5

7

Hoppers Crossing, 3029

21.9

8

Wyong, 2259

13.4

9

Liverpool, 2170

17.6

10

Cairns, 4870

7

11

Rouse Hill, 2155

24.4

Homewares &Appliances average
YOY growth

Home

10

Overview

1

3

8

6
7

11

Fashion5
2

4
VarietyStores9

Queensland

New South Wales

Victoria

Health &BeautyAbove average growth

Homewares& Appliances

Lower than average growth

New growth corridors dominated the top
11 buying locations, including last year’s
strong buying locations Point Cook and
Hoppers Crossing, whose YOY growth wassubstantially higher than the national
average for Homewares & Appliances.

online purchases, buying frequency andpopulation. It did however maintain its
high ranking due to its slightly above
average household engagement andpurchase frequency, combined with its
moderately large population.

Gosford represents a relatively mature
suburb for Homewares & Appliancespurchases. The growth is minimal across

Rouse Hill in Sydney’s booming Northwest
ranked 11 in Homeware & Appliancepurchases and is a suburb to watch.

It had well above average household
engagement and its purchase frequency
grew 1.7 times higher than the national
average. With population growth 2.1 times
above national growth6, we predict its online
purchases in Homewares & Appliances willcontinue to grow.

Homewares & Appliances

46

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Key trends
November was the busiest month for the purchaseof Homewares & Appliances, with 10.4% of theannual share.

Busiest months

1st

Home

2nd
Overview

It was followed closely by December with 9.4%. However, growthin both months was lower than the average of 11.7% for 2018.
The five largest volume weeks fell in the sales events period prior
to Christmas, starting with Click Frenzy and peaking in Black
Friday / Cyber Monday, before tapering off towards the second
week of December.
The growth of Homewares was stronger than Consumer
Electronics in all five top growth weeks except Black Friday /Cyber Monday, which had a slightly stronger growth in Consumer
Electronics. Homewares & Appliances showed strong growth of
23.7% during Black Friday / Cyber Monday, compared to averagecategory growth of 11.7%.
May Mayhem was another successful sales event for Homeware
retailers, with purchases growing 37.8% YOY. This was after anoted increase in the number of Homeware offers in the May
Mayhem sale, complementing its focus on Fashion and Beauty
items in previous years.

November

December

10.9%

8.1%

YOY growth

YOY growth

FashionVarietyStoresBusiest weeks
Busiestweek
Black Friday /Cyber Monday

23.7%

YOY growth

2nd busiest
week
3 weeks prior
to Christmas

2 weeks prior
to Christmas

YOY growth

YOY growth

10.7%

Health &Beauty3rd busiest
week

Homewares& Appliances

6.4%

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Homewares & Appliances

47

Home

Industry overview

Hobbies &Recreational Goods

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Hobbies & Recreational Goods

48

Overview
Automotive parts make up the majority of Hobbies& Recreational Goods, accounting for 25.7% ofpurchases and growing 12.2% YOY.

Home

Overview

This diverse category includes Games & Toys, Outdoor Goods,
Sporting Equipment, Automotive Parts and Gaming and grew amodest 8.5% and accounted for 6.7% of online purchases in 2018.

FashionThis is a decrease in both share and growth compared to 2017.
As some major players consolidate and invest in their online
channels, we expect to see growth in this category in 2019.

VarietyStoresHealth &BeautyHomewares& Appliances

Share of online purchases

YOY growthHobbies &Recreational
Goods

20.2%
National online
average

6.7%
2018 YOY growth

Cross border

8.5%
The technology
evolution

Hobbies & Recreational Goods

49

Digging deeper
Automotive Parts and Sporting Equipment
collectively contributed 45.3% to online
purchases of Hobbies & Recreational Goods.

Home

Overview

The strongest growth was in Outdoor Goods, growing 17.4%
YOY, followed by Games & Toys which grew by 15.5%.
Fashion

After a standout year in 2017, purchases of MusicalInstruments and Accessories declined 5.5% YOY in 2018.

VarietyStoresHealth &BeautyHobbies & Recreational
Goods highlights
Top
performer

HighestgrowthSecond highest
contributor

Automotive
Parts%

Outdoor
Goods

Sporting
Equipment%(Share)(YOY)(Share)

25.7

17.4%

Homewares& Appliances

19.6

Hobbies &Recreational
Goods

Cross border

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evolution

Hobbies & Recreational Goods

50

State and regional growthOver a third of all Hobbies & Recreational goods
purchases were delivered to regional areas inAustralia, which experienced higher growth at
10.1% compared to metro areas which grew
7.8% YOY.

8.5%

Regional growthHobbies &Recreational Goods
average YOY growth
Overview

7.8%

Major cities of Australia

10.8%

Inner regional Australia

Once again, New South Wales, Victoria and Queensland
accounted for the majority of Hobbies & Recreational Goods
purchases in 2018, contributing 76.9% in total. Tasmania wasagain the fastest growing State in 2018, growing 11.9% YOY.
This was followed closely by Victoria which also retained its
place from 2017, growing 11.6% YOY. South Australia jumped
up the rankings in 2018, up 9% YOY.

Home

Fashion10%

Outer regional Australia

6.7%

Remote Australia
Very remote
Australia

VarietyStores2.5%
Health &BeautyState and Territory growth
Homewares& Appliances

8.5%
Hobbies & Recreational Goods
average YOY growth

Tasmania%

11.9

Victoria

11.6%

South
Australia%

9

New South
Wales
%

7.8

Queensland%

7.8

Western
Australia%

6.7

Australian
CapitalTerritory%5

Hobbies &Recreational
Goods

Cross borderNorthern
Territory%

1.9

Hobbies & Recreational Goods

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evolution

51

Who’s buying?

8.5%

Top 10 buying locations by volume
Rank

Locality

Growth (%)

1

Toowoomba, 4350

11.1

2

Point Cook, 3030

16.1

3

Mackay, 4740

8.5

4

Bundaberg, 4670

8.6

5

Wyong, 2259

8.6

6

Gladstone, 4680

4

7

Cranbourne, 3977

17.3

8

Gosford, 2250

4.4

9Campbelltown, 2560

7.6

10

Sanctuary Point, 2540

9.8

Hobbies &Recreational Goods
average YOY growthHome

Overview

3

5
6
4

10

1

8
9

Queensland

Fashion2

New South Wales

VarietyStores7

Victoria

Health &BeautyAbove average growth
Homewares& Appliances

Lower than average growth

Point Cook has leapt from fifth to second
place for Hobbies & Recreational Goods
purchased online. With its rapid population
growth and above average income, we
predict Point Cook will continue to grow inthis category.

Although it has below average household
engagement and below average purchasefrequency, Toowoomba secured first placein this category due to its population size ofover one hundred thousand6.

Cranbourne, which grew its Hobbies &Recreational Goods purchases 17.3% YOY,
has also experienced high population
growth and has above average household
engagement. With its shopping frequency
below the national average, there is room
for additional growth in the years ahead.

Hobbies & Recreational Goods

52

Hobbies &Recreational
Goods

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evolution

Key trends
November and December were the peak purchasemonths for Hobbies & Recreational Goods, with analmost even 10.9% and 10.1% share respectively.
The sales peak followed overall online shopping
trends, with Black Friday / Cyber Monday taking
the number one spot and growing above average
at 10.5% YOY. This was followed by the second andfirst weeks of December.
The week before Christmas saw the largest sales leap at 25.3%
YOY, whilst being the fifth highest in terms of number of purchases.
Games & Toys accounted for 36.1% of purchases in that week,
growing over 50% YOY, highlighting the importance of last minute
Christmas shopping in this category.
End of Financial Year Sales was another strong sales event,that stimulated the sale of Outdoor Goods and Games & Toys.
Purchases of Outdoor Goods increased 33.7% YOY during the saleand Games & Toys grew 24.2% YOY, both well above the overall
category growth in 2018.

Busiest months

1st

Home

2nd
Overview

November

December

6.8%

7.2%

YOY growth

YOY growth

FashionVarietyStoresBusiest weeks
Busiestweek

2nd busiest
weekBlack Friday /Cyber Monday

2 weeks prior
to Christmas

YOY growth

YOY growth

10.5%

3.9%

Health &Beauty3rd busiest
week
3 weeks prior
to Christmas

Homewares& Appliances

4.8%

YOY growthHobbies &Recreational
Goods

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evolution

Hobbies & Recreational Goods

53

Home

Cross border
Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Cross border54

Cross-border
eCommerce trends
The global online goods market is forecast
to reach USD $3.43 trillion by 2023, taking
the share to 17% of total retail7.
eCommerce has no borders, therefore there is asignificant opportunity for Australian businesses toexpand overseas.
In this section, we examine the findings of a global
survey conducted by International Post Corporation(IPC), which studied frequent cross-border online
shoppers, including 1,037 Australian and 798 overseas
shoppers whose most recent purchases were from
Australia. It was the largest-ever global consumer
survey focused on cross-border eCommerce5.

14.8%

Compound Annual
Growth Rate2018 to 2023

Home

Overview

Global online goods market
USD in trillions
Fashion$3.43T
2023

VarietyStores2022
Health &Beauty2021
Homewares& Appliances

2020

Hobbies &Recreational
Goods

2019

$1.72T
2018

Cross border

The technology
evolution

Cross border55

Australians buying
from abroad
40% of Australian shoppers’ mostrecent purchases were from China.
The number one overseas market
for inbound eCommerce purchases
is China, capturing 40% of Australian
online shoppers’ most recent purchases.
The United States, which has declined inshare over the past two years, represents
21%, and the United Kingdom 14%.

Home

Top source countries
Most recent purchase

Overview

40%

China

21%

United States
United Kingdom
Hong
Kong

Fashion14%
VarietyStores

6%

New%
Zealand 3

Health &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Cross border56

Purchase categories
A quarter of Australia’s inbound eCommerce purchases were
Fashion related. Sport & Leisure and Home & Garden products
are trending upwards, at least two percentage points increase
from 2017.

Home

Overview

Most recent purchases
FashionLargest2nd Largest

Fashion25%

ConsumerElectronics%

Health& Beauty%(Share)(Share)17(Share)

3rd Largest
VarietyStores15

Health &BeautyHomewares& Appliances

Growth categories
Up andcomingUp andcomingSport& LeisurethHome& Gardenth(Ranking)(Ranking)

6

Hobbies &Recreational
Goods

8

Cross border

The technology
evolution

Cross border57

Most popular purchasing sites
eBay, with 44% share of Australia’s inboundeCommerce purchases, is clearly the most popularinternational online shopping platform. This isfollowed by Amazon with 9% and Wish with 8% share.
Largest2nd Largest

3rd Largest

eBay%

Amazon%Wish%(Share)(Share)(Share)

44

9

Home

Overview

Fashion8

VarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Cross border58

Average order value
Two thirds of Australian respondents spent on average
under $70, with 46% spending under $35 per transaction.

46%

of Australians spent under$35 per transaction oninternational purchases.

Returns preference
Australian online shoppers prefer to return their internationalpurchases at the Post Office (51%), with 21% preferring adelivery driver pick-up from home. This is similar to responses
in 2017.
Drop off at
Post Office

51%

Home

Overview

FashionVarietyStores

Delivery driver
pick-up from
home

21%

Health &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

Cross border59

Overseas shoppers
buying from Australia
Other than domestic purchases,
Australian products were most likely
to be purchased by consumers
based in New Zealand (accountingfor 29% of Australian exports), China(15%) and India (11%).
Purchase categories
Australian Health & Beauty and Baby
Products are in demand. Compared to the41 markets surveyed, Australia is overrepresented in these categories.
When it comes to the number of purchases,
Fashion products are our leading eCommerce
export, 31% of purchases are Fashion related
on par with the global average.

Home

Top destination countries
Most recent purchase

Overview

29%

New Zealand

15%

China

11%

India
South
Korea

4

Singapore

4%

VarietyStores%Health &BeautyTop purchase categories
LargestFashion31%(Share)Fashion2nd largest

Health& Beauty%

28(Share)Homewares& Appliances

Growth categories
Highlysought afterOver-represented

ConsumerElectronics%

Health& Beauty%

Baby & Kids
Products%(Share)Compared to
17% globally

Compared to
5% globally

3rd largest

13

28

Hobbies &Recreational
Goods

12

Cross border

The technology
evolution

Cross border60

China’s most recent cross-border purchases
Online shoppers from China are turning to Australia for trusted
and authentic products, 12% of respondents said they had
made their most recent purchase from Australia. Japan andAmerica held the largest share at 23% and 14% respectively.
Hong Kong came in third, with a share slightly above Australia.
Japan

23%

(Share)UnitedStates%Australia(Share)(Share)14

New Zealand’s most recent cross-border purchases
In New Zealand, only China captured a larger shareof their most recent online purchases than Australia.
China

Australia

33%

22%

(Share)(Share)Home

Overview

UnitedStates%19(Share)Fashion12%

VarietyStoresIndia’s most recent cross-border purchases
Online shoppers in India, expressed a stronger
preference for goods from the United States at 26%,
followed by China then Australia.

Health &BeautyHomewares& Appliances

UnitedStates%26(Share)China

Australia

23%

8%(Share)Hobbies &Recreational
Goods(Share)Cross border

The technology
evolution

Cross border

61

21%

of international
shoppers spentover $150 pertransaction on
Australian products.

Home

Overview

Fashion

Most popular websites for Australian products
The most commonly used websites for outbound Australian
eCommerce purchases were Amazon (23%), eBay (13%),
Alibaba (9%) and JD.com (5%).
LargestAmazon%23(Share)

2nd Largest

3rd Largest

4th Largest

eBay%

Alibaba%

JD.com%(Share)(Share)(Share)13

95VarietyStoresAverage order value
International online shoppers spend above average on Australianproducts. 22% spending between $35 and $69 per transaction,
while 21% spent over $150 with 10% spending more than $300.
<$15

Health &Beauty6%Homewares& Appliances18%$15–34

Hobbies &Recreational
Goods

22

%

$35–6919%$70–104

Cross border13%$105–149$150–299
$300+

11%

The technology
evolution

10%
Cross border62

Returns preferences
Online shoppers buying from Australia are typically younger,
and live in urban Asian cities. They prefer their returns parcels
to be picked up by a courier, rather than having to drop them off.

Home

Overview

19% of Australian eCommerce products are returned, which issignificantly higher than the global average of 8%.
There are several factors behind this, Australia is exporting morevaluable products than average, and Australian online retailers
are more likely to provide return labels.

FashionVarietyStores

Delivery driver
pick-up fromhome

Global shopping preferences
Overseas online shoppers are more likely to buy on theirsmartphones (39%), followed by a laptop (27%). Furthermore,
61% expressed interest in sustainable packaging, and 54% arewilling to pay 15 cents if this was offered.

34%

Drop off at
Post Office21%

Delivery driver
pick-up fromoffice / workplace

13

Health &Beauty%Homewares& Appliances

Hobbies &Recreational
Goods

27%

Cross border39%
Buy on smartphone

The technology
evolution

Buy on laptop
Cross border

63

Home

The technology evolution
Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Meeting the needs ofthe modern-day shopper

Hobbies &RecreationalGoods

Growth in technology has fundamentallyshifted eCommerce shopping behaviour,
as consumers now expect more convenienceand choice when shopping online.

Cross border

The technology
evolution

The technology evolution

64

30%

of all searches
will be completed
without a screenby 2020.

Home

Overview

Fashion

Virtual assistants

VarietyStoresMore than ever, we are seeing an increase in the use of virtual assistants,
whether they are embedded in a smartphone such as Siri or Google
Assistant or a stand-alone smart speaker such as Alexa or Google Home.
As Australians continue to adopt the use ofthis technology, it is important that retailers
ensure their content is optimised for ‘Voice’,to help maximise sales opportunities inAustralia’s fast growing direct-to-consumer
channel.
Almost 1.35 million Australian consumers
now have a smart speaker, with ownership
growing 200% between July and November
2018 – smashing global records for uptake8.

Smartspeakerownership

1.35M

Health &BeautyHomewares& Appliances

Woolworths is already ahead of this trend,with the development of the Woolworths
Assistant App for Google home, making
it easy for consumers to create and add
to their shopping lists on the go.
By 2020 it is estimated 30% of all searches
will be completed without a screen9. This
makes accurate product tagging increasingly
important for eCommerce retailers.

Hobbies &Recreational
Goods

Cross border

July 2018

November 2018
(200% growth)

The technology evolution

The technology
evolution

65

Visual search
Visual search is also becoming increasingly
sophisticated, enabling shoppers to takeand upload pictures of an outfit they like andfind similar products available for purchase.
Online Fashion retailer The Iconic, is a great
example of how this technology can be used.

The Iconic gives users the ability to upload a picture of an outfit they
have seen in a store, online or in real life. Once the image is uploaded,
the app provides a list of similar items available for purchase on the site,
significantly reducing the search time and making it a more personalised
shopping experience.

Home

Overview

For smaller retailers, it may be a case of embracing these new areas oftechnology via the Marketplaces that offer them.

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

The technology evolution

66Augmented reality
Augmented reality is revolutionising the way
we shop, by providing consumers the ability
to ‘virtually’ try a range of products andstyles before making a decision.

Home

Overview

In the beauty sector, L’Oréal is one of many leading
the way with its augmented reality app Modiface.
Consumers can use the app to test and try L’Oréal
beauty products online. From lipstick shades todifferent styles of makeup, consumers can instantly see
what products work best for their style and skin tone.

FashionVarietyStoresIkea has been a pioneer in this space. The Ikea Placeapp enables you to virtually experiment with a rangeof products and styles to suit any space.

Health &BeautyAs we are spending more time than ever online andare increasingly time poor, augmented reality is a trendthat is set to grow.

Homewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

The technology evolution67

Shopping is getting personal
More than ever, consumers expect a personalised shopping
experience, with products and offers relevant to them.
That’s a challenge UnitedStates-based Stitch Fix is rising to.
By using algorithms and data-driven
insights to reinvent the stylingexperience, they are creating avirtual ‘store-for-one’ to deliver theperfect fit for their customers.
Whilst we are seeing shoppers
responding to sales events, perhaps
ultimately ‘fit’ could be more
important to consumers than price.
Netflix is a great example of abusiness that is using algorithms
to offer personalised viewing
recommendations; based on theuser’s previous viewing. The algorithm
is constantly being updated toensure it provides the most
relevant information.

Home

Retailers who use algorithms
and data-driven insights to deliver
experiences relevant to the consumer
may have an advantage. This may
ultimately lead to better customer
engagement and conversion.

Overview

FashionVarietyStoresHealth &Beauty'Fit' could be
more important
to consumers
than price.

Homewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

The technology evolution

68The evolutionof the chatbot

Home

With continual improvements in language
processing, AI-enabled chatbots offer
the convenient, 24/7 personalised
shopping experience consumers now
expect. Chatbots can proactively giveproduct recommendations and guidethe conversation – just as a human sales
assistant would do in a store.

Overview

FashionVarietyStoresThe Australia Post chatbot was responding to morethan 2,000 customer queries every business day,within just seven months of launching. Customers
access the chatbot by clicking on the “Ask Australia
Post” icon on the Tracking or Help and Support page.

Health &BeautyHomewares& Appliances

Chatbots are an exciting opportunity for retailers,as they meet customer expectations for immediate
support, in a cost-effective way.

Hobbies &Recreational
Goods

Cross border

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evolution

The technology evolution

69

New ways to pay
The average eCommerce website requires shoppers to click
22 times before completing their purchase10. However this is
set to change with the use of biometric technology, whichhelps to eliminate fraud and speeds up the checkout process.
Research indicates 68% of consumers
in Australia, the United States andthe United Kingdom believe biometricpayments will become more common
within the next two to five years11.
Régis Bauchiere, General Manager
Identity Services at Australia
Post said;“The sensors we need to capturebiometric data are embedded in oursmartphones, making them the best
tool to encourage different types oftransactions, including eCommerce.

Margo Stephen, Australia Post’s
Head of Digital ID™ said;

68%

Home

Consumers believe
biometric payments
will become
more common.

Overview

Fashion“By linking biometrics with valid
documentation, we can create areusable digital identity, giving
retailers more confidence in knowing
customers are who they say they are.”VarietyStoresHealth &BeautyAs online shoppers continue toembrace new technology, their habitschange quickly, and so do their
expectations of a speedier, moreintuitive online shopping experience.

Homewares& Appliances

Hobbies &Recreational
Goods

For high value transactions, or
restricted goods (such as medicationor alcohol), or when you needcertainty of delivery; biometrics canverify the buyer is who they say
they are, and is eligible to buy that
product,” explains Bauchiere.

Cross border

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evolution

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70

Home

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Biometric
technology could
help eliminate
fraud and speed
up the checkout
process.

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evolution

The technology evolution

71

Methodology
The main sections of this report are based on analysis of 2017and 2018 deliveries data recorded by the Australia Post Group,
unless otherwise stated. Commentary in this report relating
to online shopping is based on an extrapolation of this data.
Household penetration and year on year growth numbers are
based on actual or extrapolated transaction volumes.
The data and insights are reported at postcode, State andTerritory, major city and regional Australia levels. For ease ofreference, postcodes are substituted with suburb or locality
names where appropriate. In instances where more than one
suburb share a postcode, one location name is referenced.
The tables in the ‘Who’s buying?’ sections are based on modelled
figures representing the top buying locations by transaction
volume. The analysis excludes central business district (CBD)
locations and postcodes with low household counts.
Specialty retailers are segmented into product categories;
Fashion, Variety Stores, Health & Beauty, Homewares &Appliances, Hobbies & Recreational Goods, Media, and Specialty
Food & Liquor.
The report also draws on: modelled estimates from Australia
Post consumer surveys, statistics from the Australian Bureau of
Statistics (ABS), online retail environment data from Quantium
and publicly available information.

References to sales events and weeks are based on the dates
below compared to the equivalent periods in 2017:

Home• Click Frenzy week data from 11–17 November.
Overview• Lead up to Black Friday data from 18–24 November• Black Friday / Cyber Monday data from 25 November
to 1 December

Fashion• 3 weeks prior to Christmas data from 2–8 December• 2 weeks prior to Christmas data from 9–15 December

VarietyStoresThe ‘cross border’ section is based on the findings of a global survey
conducted by International Post Corporation (IPC). The survey
covered 41 countries: Australia, Austria, Belgium, Brazil, Canada,
China, Cyprus, Denmark, Finland, France, Germany, Greece, Hong
Kong, Hungary, Iceland, India, Indonesia, Ireland, Italy, Japan,
Latvia, Luxembourg, Malaysia, Mexico, the Netherlands, New
Zealand, Norway, the Philippines, Portugal, Russia, Saudi Arabia,
Singapore, Slovenia, South Korea, Spain, Sweden, Switzerland,
Thailand, the United Kingdom, the United States and Vietnam.
The survey targeted frequent cross-border online shoppers, who hadbought physical goods online at least once in the last three months
and had made a cross-border online purchase in the past year.
The section examines the key findings relating to 1,037 Australianand 798 foreign-based online shoppers whose most recent
cross-border purchase was from Australia. It also draws onmarket figures from Euromonitor International.
Methodology

Health &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

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evolution

72

References
1.

Online Physical Goods Index (produced by Quantium), and Australian Bureau of Statistics (ABS)retail turnover excluding cafes, restaurants and takeaway food services, 20192.

Online Physical Goods Index (produced by Quantium), March 2019

Home

Overview

3.

ABS, Retail turnover (excluding cafes, restaurants and takeaway food services), 20194.

Australia Post Consumer Survey, 2018

5.

International Post Corporation (IPC), Cross border eCommerce shopper survey, 20186.

ABS, Census, 20167.

Euromonitor International, Global online goods market figures, 20188.

Versa, The Voice Report - Australian Voice ownership and usage report, 20199.

Gartner Predicts 30% Of Searches Without A Screen In 4 Years, December 2016

FashionVarietyStoresHealth &Beauty10. Payments.com, Checkout Conversion Index, April 2018
Homewares& Appliances

11. Mobile Payments Today, Study - Consumers unsure about biometric payments, August 2018

Hobbies &Recreational
Goods

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evolution

References73

Contacts
Australia Post’s analytics team provides a range of data solution services, and is responsible forputting together the insights in this report. If you have any questions or would like to know more,
please contact your Australia Post Account Manager (if you have one) or contact us at
einsights@auspost.com.au

Home

Overview

Authors
FashionRose Yip
Head of eCommerce Data Analytics
Edward Jones
Senior Data Analyst

VarietyStoresHealth &BeautySpecial acknowledgments
Stephanie Hewish
Meijuan Zhao
Celestine AireyMark Harrington

Homewares& Appliances

Hobbies &RecreationalGoods

To access past reports, go to auspost.com.au/einsights

Cross border

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evolution

Contacts

74

Home

Overview

FashionVarietyStoresHealth &BeautyHomewares& Appliances

Hobbies &Recreational
Goods

Cross border

The technology
evolution

About Australia Post
With an unrivalled retail and delivery network, we’re making
it easier for you to connect with your customers, and findnew ones both here and overseas.
Through our suite of eCommerce-driven logistics, supply
chain and parcel delivery solutions, we can help you toprovide seamless eCommerce delivery experiences, fromcheckout to delivery.
To find out how we can help your business go further,sooner, visit us online at auspost.com.au

This report is provided for general information purposes only and is not intended to be specific advice for your business.