Online Retailing and E-commerce in Australia

Online Retailing & E-Commerce in Australia

According to the Global Retail E-Commerce Index, Australia ranks as the 10th best e-commerce market globally with online sales growing by 9% in 2014.

Robust economic growth and prosperity, strong growth in internet and broadband connectivity, high penetration of smartphones & tablets and acceptance of e-commerce have all contributed to strong growth in online retailing in Australia.

Internet Connectivity

According to the Australian Bureau of Statistics, the number of households with access to the internet at home increased, reaching 7.7 million in 2014–15, representing 86% of all households (up from 83% in 2012–13).  This increased to 97% for households with children under 15 years.    Most households who accessed the internet did so through a desktop or laptop computer (94%), followed by households who accessed via mobile or smart phones (86%) and households who accessed via tablets (62%). Households may have used one or more of these types of devices.

Online Retail Environment

The traditional bricks and mortar retailers in Australia have been relatively slow in developing their digital commence platforms and consumers still face comparatively limited product options and variety. More recently, however, there has been strong growth in the number of new entrants with bricks-and-mortar retailers, international online entrants and small local operators launching online stores . Despite a somewhat immature e-commerce market, lack of variety and high buying power, Australians have become increasingly confident buying online. Consumers are value-concious, seek competitive pricing and discounts and will also engage in showrooming and social media to research products. Brands are also important with many consumers sticking to trusted and known brands.

Purchasing Online

According to the Australian Bureau of Statistics, in 2014–15 the proportion of internet users who purchased or ordered goods or services over the internet in the previous three months was 61% (9.7 million people). The three most common groups of goods or services purchased or ordered online were: music, movies, electronic games or books (50%); clothes, cosmetics or jewellery (46%); and tickets and bookings for entertainment events (45%).

The average number of transactions for internet users who purchased or ordered goods or services online in the previous 3 months was 11 transactions.


The online retail market in Australia is relatively fragmented, diverse and consists of a wide range of retailers across segments.  This is in stark contract to the bricks-and-mortar market which is highly concentrated with Wesfarmers and Woolworths accounting for around 80% ofmarket share.  Their brands encompass supermarkets, department stores, home improvement, office supplies and financial services.   In online retail, the two largest players are also Wesfarmers and Woolworths which, in combination, account for approximately 22% of the online retail market share.

International Websites

Overseas websites and retailers operate in Australia and generally are able to offer competitive pricing and benefit from economies of scale. An extended period of Australian dollar strength has encouraged consumers to shop on overseas websites.  However, the cost of goods on international sites has become relatively more expensive in recent times as the Australian dollar exchange rate has fallen from its peaks in 2011/2012.

Adapting an existing international site for the Australian market is feasible if language & cultural similarities exist.  Other considerations include:

  • Ensuring sizing & measurements are localised or converted
  • Utilising local card & payment systems
  • Quoting prices in Australian Dollars
  • Appropriate delivery and returns policies
  • Localising for seasonal differences (especially for seasonal special offers and outbound marketing)

International retailers have also chosen to launch sites - or at least customised Australian landing pages - specifically targeting the Australian market dedicated to local consumers with targeted marketing and faster delivery.


Online retailers are generally subject to the same legislation as traditional bricks-and-mortar stores in Australia. The Competition and Consumer Act 2010 applies and is enforced by the Australian Competition and Consumer Commission. The Australian Consumer Law sets out rules for businesses to abide by when dealing with their customers. This includes consumer protection, rights & obligations, debt collection, telemarketing, product safety, unfair business practices, warranties and selling parallel imports. This includes advertising & misleading claims, labelling, price setting, customer transactions, competition and complaints.
The Australian Communications and Media Authority (ACMA) is the statutory body that that regulates online content in Australia. ACMA develops best practice for online retailers, consumer internet safety and investigates complaints. ACMA is also responsible for the Do Not Call Register (DNCR) and anti-spam laws under the Spam Act 2003.

[Sources:  Australian Digital Transformation Lab, a joint venture between the University of Sydney Business School and Capgemini.   AT Kearny The 2015 Global Retail E-Commerce Index.   Australian Bureau of Statistics:  Households using the Internet, Internet subscribers and Internet service providers, Retail Sales]

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