Online to account for 7% of Aussie retail sales

These figures were all revealed in Frost & Sullivan's latest research, Australian and New Zealand Online Shopping Market 2013, which is based on an annual survey of 1,000 online shoppers in Australia.

Phil Harpur, Senior Research Manager, Australia & New Zealand ICT Practice, Frost & Sullivan said, "We expect continued growth in online sales over the next five years with a Compound Annual Growth Rate (CAGR) of 13.1%. Online sales as a percentage of total retail sales are predicted to increase from 7.0% in 2013 to 9.8% by 2017."

A greater variety and choice of goods offered from an increasing number of local and international online retailers, particularly in the fashion segment has contributed significantly towards stimulating retail purchases online by consumers in Australia.

"Overseas retailers such as ASOS and Macy's have been actively targeting the Australian market over the last couple of years. This has increased the overall level of competition in the local online retail market. Local retail chains have also stepped up their online activity, creating increased awareness amongst consumers and increased media coverage of online shopping," Harpur stated.

"Customers have become more comfortable with the online shopping process, including reduced concerns over security and higher levels of confidence in the delivery process, which helps drive growth in online shopping. The strength of the Australian dollar increases purchasing power of local consumers on overseas sites, and has also been a strong driver of growth. However, the recent fall in the value of the Australian dollar will reduce the attractiveness of shopping on overseas sites," explained Harpur.

Harpur elaborated, "79% of Australians who shop online currently purchase from overseas sites to some extent, and an estimated 45% of Australian online expenditure goes to overseas-based web-sites. However over the past two years the proportion of online shoppers in Australia shopping on local sites only increased from 21% in 2011 to 25% in 2012 and 29% in 2013.

Large local retail chains such as Harvey Norman, Myer and David Jones have been improving and expanding their online offerings and this has raised the overall range of goods and services available locally. Increased online presence of these large retailers has also raised awareness for all local online retailers.

Mobile shopping has already seen widespread uptake in Australia. 30% of all Australian internet users aged between 15 and 65 have purchased physical goods online during the last 12 months via a smartphone, whereas 19% have purchased via a tablet.