COVID-19 is proving to have some benefit for the Australian businesses, according to new findings from GlobalData.
GlobalData states the eCommerce market in Australia has been on a high growth curve during the past few years, and the COVID-19 outbreak is further set to drive the eCommerce sales in the country at a compound annual growth rate (CAGR) of 10.3% between 2020 and 2024.
GlobalData's eCommerce Analytics reveals that eCommerce payments in Australia are estimated to grow by 13.9% in 2020 to reach A$52.2 billion (US$36.7 billion), as wary consumers stayed home and used online channels to avoid physical contact.
The trend is likely to continue and as a result, eCommerce sales in Australia are expected to reach A$77.1 billion (US$54.2 billion) in 2024.
According to Australian Bureau of Statistics, online sales in Australia registered a 55% rise in December 2020 compared to the same period last year.
Furthermore, Australia Posts Online Shopping Report published in January 2021 reveals that more than 5.6 million Australian households shopped online in December 2020, a 21.3% growth compared to 2019 average.
As Australian consumers continue to embrace online shopping, the use of electronic payments will increase as consumers move away from cash, GlobalData states.
Payment solutions such as PayPal, POLi, Apple Pay and Google Pay are benefitting from this trend.
According to GlobalData's 2020 Banking - Payments Survey conducted in Q1 2020, payment cards were the most preferred payment method for eCommerce purchases in Australia, accounting for 52.3% share while alternative payment solutions accounted for 38.1%.
Buy now, pay later solutions are also becoming popular in Australia, particularly among millennials, who use this as a budgeting tool to spread payments.
Almost 5.8 million Australians have a buy now pay later account with brands including Afterpay, Zip, Openpay, Humm and Klarna.
According to GlobalData, Afterpay accounts for 5.6% of the total eCommerce payments.
As an example of a business capitalising on the growing eCommerce sales, clothing retail company H-M launched its online store in Australia in October 2020.
It also partnered with buy now and pay later solution provider Klarna to offer a convenient and flexible payment option.
GlobalData Banking and Payments Senior Analyst Shivani Gupta says, “COVID-19 has changed consumer buying behaviour as they are increasingly switching from offline to online channels.
"With social distancing rules and closure of many brick and mortar stores, shoppers had to embrace online channels for day-to-day shopping.
Shivani says, “COVID-19 crisis opened the eCommerce market to a whole new set of consumers, who were not using online channels.
"A significant rise in consumer preference for online channels during the pandemic coupled with proliferation of online retailers and customised payment solutions will further drive eCommerce growth in Australia.