To the surprise of no-one, the popularity of online shopping skyrocketed in 2020 during the ongoing COVID-19 pandemic, with growth of nearly 60 per cent from the previous year, adding millions to the coffers of Australia Post.
According to Australia Post’s 2021 Inside Australian Online Shopping report, ecommerce grew by 57 per cent from 2019, with Australians spending a staggering $50.5 billion online last year.
The increase in online shopping corresponded with a record year for Australia Post, with its revenue up 7 per cent to $7.5 billion.
Australia Post had a full-year profit before tax of $53.6 million in the 2019-20 financial year thanks to this boom in e commerce, with its parcel and services revenue at $5.5 billion, up 15 per cent year-on-year. Its revenue from domestic Australia Post-branded parcels rose by 25 per cent to $2.5 billion in the financial year.
In 2020, online shopping accounted for more than 16 per cent of total retail spend, Australia Post general manager of Parcel and Express Services Ben Franzi said.
“Almost nine million households across the country bought something online as people shopped for the things they needed, avoiding large shopping centres and other busy retail settings,” Franzi said.
“More than 1.3 million of these households were first-time shoppers with 93 percent of their initial purchases made between March and December.”
The increase in online shopping was lucrative for Australia Post, with the organisation hiking its basic postage rates by 10 per cent in March last year, which came at a good time for the company.
A spokesperson for Australia Post said there were no fee increases during the pandemic.
“Australia Post held steady the cost to consumers of sending items through COVID-19, during which time we continued to help connect people and communities with each other and the world, while we faced increasing costs,” the spokesperson told Information Age.
“Prior to this, in early 2020, we introduced a new 250g weight threshold for international Standard, Express and Courier services and adjusted the basic postage rate to $1.10.”
According to the Australia Post report, many of these first-time shoppers were online shopping regulars by the end of 2020, the report found, while even the established regulars vastly increased their online shopping binges.
“We found that of the 240,000 households who made an online purchase for the first time in April, half were regular shoppers by the end of the year after shopping online in at least three of the months between May and December,” Franzi said.
“When it comes to seasoned shoppers, the average household increased its online shopping frequency by at least 10 purchases over the year, and the range of categories and retailers they purchased from also expanded significantly.
“Shoppers are more engaged and comfortable buying online than ever before and this trend has continued into 2021,” Franzi said.
“We’re seeing around five million households continue to buy on a monthly basis which is 1.1 million more than the average in 2019.”
Every single state and territory in Australia recorded double digital growth in online sales last year.
Unsurprisingly it was Victoria, the state which experienced the longest lockdown last year by far, saw the biggest growth in online sales, with a jump of more than 80 per cent year-on-year.
New South Wales was the next highest, with an increase of 50.5 per cent.
The most popular products to buy online last year were food and liquor, followed by home and garden products.
The increase in popularity of online shopping comes as ecommerce giant Amazon is expected to explode into the local Australia market.
Morningstar’s equity research team predicted that Amazon would nearly triple its Australian footprint in 2021, securing a “considerable chunk of Australian retail turnover”.
By 2030, Amazon will account for about 25 per cent of Australian online retail sales, the report found.