The latest edition of the Digital Economy Index by financial platform Airwallex reveals that Australians are spending less on their online shopping than before, in particular with an average of nearly $600 less online than they were a year ago.
The index noted that online spending declined by 1.82 per cent which is worth $523.3 million in Q2 this year compared to Q2 2022. Online spending is estimated to have dropped $587 per adult across the 12-month period up to and including Q2 2023, compared to Q2 2022.
The Index also recorded strong upticks in online education and travel spending; however, these were overshadowed by a decline in retail, insurance and self-managed investments.
The Index noted specific trends in online spending in each state, particularly:
- NSW: Overall decline in revenue turnover compared to last year (-7.93 per cent) driven by a steep drop in online subscriptions (-17.75 per cent) and travel spending (-9.15 per cent). However, digital travel businesses have seen a rebound compared to Q1 this year (+15.11 per cent).
- VIC: Victoria’s digital businesses saw a nearly 6 per cent lift in revenue turnover (vs Q2 2022) on the back of a jump in eCommerce spending (+8.28 per cent) and education (+4.24 per cent). Digital travel spending continues to drag however, dipping -1.91 per cent.
- QLD: Queensland’s digital economy rose +3.90 per cent compared to last year, influenced by a 5.2 per cent increase in online travel spending. Queensland is seeing declines in spending in online education (-5.55 per cent) and eCommerce (-5.60 per cent).
- WA: Western Australia’s digital economy grew at 2.81 per cent for the year, thanks to a surge in online technology and digital content spending (+5.22 per cent) and travel booked online (+6.77 per cent). WA eCommerce businesses have seen an overall 7.71 per cent drop in spending compared to last year, and down 4.9 per cent compared to Q1 this year.
- SA: South Australia had the worst-performing digital economy this quarter with online spending shrinking 16.77 per cent and declines recorded across all industries in the digital economy for both time periods (vs Q2 2022 and vs Q1 2023).
- TAS: Tasmania’s digital economy continues to be a powerhouse, with revenue turnover increasing 12.8 per cent compared to last year. However, there are signs a contraction is looming with a -4.89 per cent drop compared to Q1 this year. Tasmania’s online travel sector is driving the growth, spiking 15.01 per cent for the year.
Airwallex Director of Strategy for Australia and New Zealand Amelia Hamer said the Index showed the spending downturn was uneven across the country as different parts of Australia felt the effects of the broader uncertain economic environment.
“Across the digital economy, we see Australians are holding back on their discretionary spending,” Hamer said. “As interest rates have climbed and cost-of-living pressures have increased, it’s no surprise Australians are being more selective about where they spend online.”
“We see several bright spots in Australia’s digital economy, with the technology, education and travel sectors seeing the most upside,” Hamer added. “There are still lingering effects of the travel bounceback post-COVID in this data, with the surge in online travel particularly benefitting destinations like Queensland, Tasmania and WA. However, the data shows that NSW is bearing the brunt of the change in how Australians are spending their money online. This downturn is something we’re seeing in the quarter-by-quarter comparisons in other states, too.”
