Australia E-Commerce Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Australia E-Commerce Market Trends and Insights

Afterpay-Led BNPL Uptake Accelerating Gen-Z Average Order Values

BNPL penetration surpassed 3.5 million active Afterpay users by early 2025, and Gen Z shoppers now place orders 30% larger than traditional credit-card purchasers in fashion and electronics.^{[1]Australian Financial Review, “Afterpay Hits 3.5M Australian Users as BNPL Growth Continues,” afr.com} Checkout friction has fallen because installment options replace revolving credit, lowering cart abandonment that once stripped 15-20% of potential revenue. Zip’s rollout in Coles and Woolworths self-checkout lanes during 2024 pushed BNPL beyond discretionary items into essential grocery baskets. Although the Australian Securities and Investments Commission proposed mandatory credit checks in 2025, reduced default risk is expected to balance slower account growth.^{[2]Australian Securities and Investments Commission, “ASIC Proposes Credit Checks for BNPL Providers,” asic.gov.au} The persistent preference for liquidity among younger cohorts positions BNPL to keep absorbing share from cards throughout the forecast period.

Dark-Store Grocery Expansion Enabling Less-than-Two-Hour Metro Delivery

Woolworths runs 15 automated customer fulfillment centers processing more than 30,000 online grocery orders daily, compressing delivery to under 2 hours in Sydney and Melbourne. Coles mirrored the strategy with its Ocado-powered Melbourne site, where robotic grids pick 6,500 units per hour.^{[3]Australian Financial Review, “Coles Ocado Automated Warehouse Opens in Melbourne,” afr.com} This capacity encourages shoppers to trade larger baskets for immediacy in dense urban corridors where traffic deters store visits. ALDI’s DoorDash partnership, rolled out nationally by September 2025, layered 1,800 SKUs onto same-day networks, escalating the quick-commerce race. Because each dark store costs upward of AUD 90 million (USD 60 million), only capital-rich chains can scale, forcing smaller rivals into margin-dilutive third-party aggregators.

Click-and-Collect Mandates Reducing Last-Mile Costs for Omnichannel Retailers

Click-and-collect contributed around 40% of national e-commerce sales in 2024 as retailers waived delivery fees to nudge customers toward pickup. Bunnings extended its Direct-to-Boot service to more than 300 outlets, allowing same-day curbside retrieval for bulky orders. Woolworths and Coles integrated dedicated bays that cut wait times below 5 minutes, heightening repeat use. Retailers note that 30–35% of pickup customers add in-store items, offsetting free-pickup margin loss. Australia Post’s 20% rural surcharges in 2025 further tilted regional economics toward pickup, though sparse store networks still limit viability in remote zones.^{[4]Australia Post, “2025 Parcel Delivery Pricing Update,” auspost.com.au}

Increasing Cross-Border Demand for Australian Wellness Brands via Chinese CBEC Gateways

Australian labels such as Swisse, Blackmores and A2 Milk generated significant revenue through Tmall Global and JD Worldwide in 2024-2025 as Chinese consumers sought trusted origin products. Tmall’s Australia pavilion carried more than 2,000 SKUs, dominated by vitamins, infant formula and skincare. JD Worldwide’s bonded warehouses cut delivery to 3-5 days, lifting conversions. China’s 2024 positive list raised per-transaction ceilings to CNY 5,000 (USD 700), enabling higher-value checkouts without full import duty. Tariff removal under the Australia-China Free Trade Agreement further boosts price competitiveness.

Australia Post Rural Capacity Constraints Inflating Shipping Surcharges

Australia Post imposed surcharges exceeding 20% on remote deliveries during 2025, citing low-density route costs. Regional merchants face a stark choice between diluting margins or passing fees that push cart abandonment above 40% for orders under AUD 100 (USD 67). Competing carriers focus on metro corridors, leaving a service vacuum in rural Australia. Regulatory asymmetry compounds the issue, as Australia Post retains a letters monopoly yet has no parcel-price ceiling, a gap highlighted in the ACCC’s 2024 postal inquiry.^{[5]Australian Competition and Consumer Commission, “ACCC Inquiry into Australia Post Services 2024,” accc.gov.au} Sparse click-and-collect locations limit alternative fulfillment, depressing online adoption outside major centers.

ACCC Draft Cap on Marketplace Service Fees Squeezing the Margins

The ACCC’s digital platform services inquiry proposed capping referral and fulfillment fees at 15% in 2024, a move that would trim marketplace margins by 3-5 percentage points. Amazon Australia currently charges sellers 8-15% on referrals plus 5-8% for FBA services. eBay’s final-value and promoted-listing fees can hit 14%, also in policy crosshairs. Fee cuts could draw more sellers, heightening competition and depressing unit economics while fixed compliance costs under the Australian Consumer Law remain unchanged. Operators must balance lower take-rates with investments in trust and safety or risk eroding customer experience.

Segment Analysis

By Business Model: B2B Digitization Accelerates

B2C transactions accounted for 60.34% of the Australia e-commerce market in 2025, yet B2B sales are forecast to expand at a 13.12% CAGR through 2031. High purchase frequency, lower basket values and entrenched consumer platforms sustain B2C dominance, while small and medium enterprises shift procurement online to reduce manual ordering. Amazon Business attracted more than 10,000 Australian vendors by 2025, offering multi-user accounts and tax-exempt purchasing options. BigCommerce reported rising demand for integrated approval workflows that replicate enterprise resource planning features. The convergence of shared fulfillment nodes and unified inventory systems lets retailers amortize fixed costs across both channels, widening competitive moats.

Longer sales cycles, credit terms and larger average order values differentiate B2B economics, but digital catalogs now incorporate bulk pricing and punch-out integration, narrowing usability gaps with consumer experiences. Woolworths leverages its grocery supply chain to serve hospitality operators, an adjacency that cuts last-mile duplication. Marketplaces able to reconcile B2C velocity with B2B basket size are positioned to capture a sizable slice of incremental gross merchandise value. Accordingly, the Australia e-commerce market should witness deeper vendor-managed inventory partnerships and curated vertical portals over the forecast horizon.

By Device Type (B2C): Mobile Commerce Dominance

Smartphones contributed 63.47% of B2C revenue in 2025 as retailers embraced app-first strategies and seamless biometric payments. Desktops still drive considered purchases such as large appliances because screen real estate eases comparison. Temple and Webster noted that 55% of furniture sales remained desktop-based in 2025. Meanwhile, non-traditional access points are growing quickly: smart TVs and voice assistants are projected to rise at 14.23% CAGR to 2031, aided by Amazon Alexa re-order functionality and early streaming-commerce pilots. The Iconic’s shoppable video tests lifted conversion by 20% among Gen Z users.

Fragmented entry points complicate attribution and inventory planning, yet they also diversify traffic away from Google and Meta paid channels. Retailers embedding one-click payments and persistent login tokens on every screen lower friction across the shopper journey. As 5G coverage expands, latency drops and augmented-reality overlays enhance conversion on smaller displays. Overall, multi-device orchestration will play a central role in sustaining engagement and average order values within the Australia e-commerce market.

By Payment Method (B2C): BNPL Disruption Accelerates

Cards retained 44.61% share of online payments in 2025, underpinned by established infrastructure and reward programs. Yet BNPL is scaling at 13.47% CAGR, driven by zero-interest installments and gamified repayment apps. Afterpay and Zip together cover both discretionary and grocery segments, illustrating a maturation from early fashion focus. Digital wallets such as Apple Pay and Google Pay shrink checkout time on mobile, especially after network tokenization reduced friction.

BNPL merchant fees exceed card interchange but merchants tolerate the premium because basket uplift offsets margin dilution. Regulators plan to impose credit checks that could slow customer acquisition yet reduce write-offs. Cards will remain relevant for high-ticket travel and electronics purchases, while bank transfers and cash-on-delivery persist in niche cross-border contexts. Overall, checkout diversification cushions the Australia e-commerce market from single-point failure risks and underpins conversion resilience.

By Product Category (B2C): Food and Beverages Transformation

Fashion and apparel held 21.38% of 2025 gross merchandise value, anchored by The Iconic’s 2 million active customers and Shein’s USD 819 million Australian turnover. Still, food and beverages is tracking a 12.83% CAGR as dark stores and same-day fulfillment bridge the gap between online ordering and mealtime. Coles and Woolworths invested a combined AUD 200 million (USD 134 million) in automation between 2024 and 2025, enabling chilled-chain reliability within 2 hours. ALDI’s DoorDash rollout intensified grocery competition with 1,800 SKUs accessible nationally.

Electronics enjoy high average selling prices and low return rates, while beauty thrives on subscription replenishment and influencer engagement. Furniture depends on AR visualization, and DIY leverages click-and-collect to avoid bulky-item delivery charges. Fashion faces elevated return rates exceeding 30%, pressing retailers to develop virtual sizing or offset costs through membership fees. Category dynamics therefore remain heterogeneous, with infrastructure and customer-experience innovations dictating growth pockets inside the Australia e-commerce market.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Australia’s e-commerce sales concentrate heavily in New South Wales and Victoria, together representing about two-thirds of national gross merchandise value in 2025. Sydney and Melbourne benefit from dense populations, higher disposable income and the nation’s most advanced logistics nodes. Queensland accelerated during 2025 after Coles and Woolworths extended dark-store coverage to Brisbane and Gold Coast, shrinking grocery delivery to under 2 hours. Western Australia and South Australia lag because longer trunk routes inflate shipping surcharges and restrain next-day delivery promises.

Tasmania and Northern Territory remain underserved due to low density and high inbound freight costs, though local operators are piloting micro-fulfillment to boost service levels. The Australian Capital Territory exhibits outsized per-capita online spend given public-sector salaries and early tech adoption. Export-oriented merchants base warehouse operations near Melbourne and Sydney airports to expedite cross-border shipments through bonded zones into China. Regulatory alignment under the Australia–China FTA further incentivizes exporters in these states.

5G coverage reached 85% of Australians by mid-2025, but rural areas trail metro regions by 12-18 months, widening the digital divide in mobile checkout speed. Click-and-collect penetration is highest in suburban belts where store carparks facilitate curbside handoff. Metro centers lean toward home delivery due to dense apartment living and limited parking. Consequently, regional strategy requires hybrid fulfillment combining postal, pickup and third-party aggregators, while metro strategy emphasizes automation and rapid delivery to defend share in the Australia e-commerce market.