Australia has seen a rapid adoption rate of eCommerce. Teresa Sperti, founder and director, Arktic Fox, discusses whether Australian brands will get steamrolled compared to the global ‘giants’ entering the market.
eCommerce in Australia is experiencing a surge. Our recently released report, ‘Digital, Marketing & eComm in Focus 2025,’ shows that 2024 broke new eCommerce records. Among our insights, we cited Australia Post data that revealed some 9.8 million Australian households spent more than $69 billion online in 2024, a 12 per cent increase compared to the previous year.
This growth isn’t going to slow down. Australia is already highly acclimatised to online shopping, and the next generation of buyers is digital-first. Australian retailers have been watching these shifts unfold, but a downturn in trading performance for many has driven them to double down on delivering short-term performance outcomes.
This, on its own, would be a challenge for Australian brands that were perhaps getting pipped by their peers in the same local marketplace, but it feels like that ship has already sailed. International giants like H&M, Uniqlo, Zara, Sephora, Amazon, and Temu have established themselves in the Australian market, and they’ve brought sophisticated eCommerce capabilities built through years of global competition.
No longer competing with other local businesses slowly figuring out the finer points of good digital commerce at the same pace, Australian brands are up against massive, established players with deep eCommerce and omnichannel expertise, substantial technology investments, and proven approaches for personalisation, customer data management, and seamless omnichannel experiences.
Australia doesn’t exist in a vacuum, yet it’s frustrating to see so many local brands remain complacent and undervaluing the true influence of digital and eCommerce despite years of warning signs. With global giants now firmly established and bringing their sophisticated eCommerce capabilities to bear, this challenge is substantial. But just how serious are these maturity gaps, and what’s driving them?
The Maturity Crisis
Since we began examining eCommerce as part of our annual Digital, Marketing & eComm report two years ago, we’ve seen a positive shift in how brands perceive the importance of eCommerce and omnichannel experience delivery. However, the data we collect suggests less confidence, capability and meaningful progress when it comes to implementing and innovating in the digital and eCommerce space.
While the eCommerce market has grown strongly over the past 12 months in Australia, that growth isn’t distributed evenly. Over 20 per cent (25 per cent) of retailers saw significant growth in eCommerce (20 per cent + YOY) , while 38 per cent grew by less than 10 per cent; some of those even recorded negative growth.
The numbers are telling, with 75 per cent of all surveyed brands feeling their eCommerce maturity lags behind global leaders and they have work to do. 62 per cent of leaders believe their business understands the importance of delivering an omnichannel experience, which suggests a pretty big number of those that still don’t.
Looking at just retailer respondents from our data, we know that 36 per cent of retailers believe their maturity compared to global leaders is very low or low. When we include moderate maturity, that grows to 67 per cent. In fact, only 2.5 per cent of retailers believe their maturity is very high and on par with global leaders.
Whilst many Australian retailers are not the size and scale of global players, upweighting capability to better compete with global leaders is important for Australian businesses if they want to remain competitive or relevant. As mentioned above, growth in eCommerce (and more broadly, digitally influenced sales) will continue as more consumers are born into a marketplace where eCommerce and digital storefronts are more natural than novel.
Consider this: many eCommerce strategies were probably developed with millennial behaviours in mind: internet-savvy hybrid shoppers who value choice. In 2024, millennials, now all of workforce age, spent $24.9 billion online, according to an Australia Post report.
Gen Z, however, who may still be early in their careers or even yet to join the workforce, are already having a massive impact, with an online spend of $11.9 billion, rivalling close to that of boomers and already nearly half that of millennials. Right behind them, Gen Alpha will also further accelerate eCommerce adoption.
While millennials were the generation to grow up alongside the emergence of the internet, Gen Z and Alpha have entered a world where digital is the default. Fuelled by influencer marketing and rapid short-form social media content, online will quite likely be the primary mode in which they buy goods.
Is It Now or Never?
It feels like Australian brands are caught between yesterday’s thinking and tomorrow’s reality, while international competitors build next-generation capabilities that will define the future of retail. The goal posts are shifting quickly and the comfort of local market competition is gone, with the giants well and truly established in-market.
Our research shows that Australian consumer and FMCG brands are already adopting marketplaces in droves, with 60 per cent of brands now leveraging marketplaces and aggregators as part of their eCommerce strategy and that uptake and investment is going to grow in the year ahead as brands seek to engage in the environments that shoppers are increasingly leveraging.
Based on our research, it’s clear there are a number of considerations our brands need to make.
Australian brands need to stop looking at yesterday’s revenue in eCommerce and get serious about eCommerce being central to their business to drive performance.
This means investing in personalisation, accelerating the build of a 360-degree view of the customer, and delivering connected and valuable omnichannel experiences. It also means streamlining processes for users, such as ensuring a fast and responsive shopping experience, making the checkout process quick and easy, and providing good shipping options.
Furthermore, streamlining processes for merchants and vendors with improved listing interfaces, tracking and measurement systems will also help.
With global giants now established in Australia and generational shifts accelerating digital adoption, local retailers face a choice: adapt their approach or risk future profitability and revenue for the business. The window for gradual improvement is closing.
This article referenced insights collected in the Digital, Marketing & eComm in Focus 2025 report. To see the full report and findings, click here. A purely retailer-focused version of the report has also been produced, available here.
