A new report reveals that online spending has dropped by $2.9 billion year-on-year (YoY), indicating a spending downturn in the retail and eCommerce sectors.
The Q3 Digital Economy Index from global financial platform Airwallex found that online spending has dipped YoY across all sectors from 1.29 per cent for the digital and technology sector, to nearly 7.0 per cent for education, 7.9 per cent for insurance and self-managed investments and 8.02 per cent for retail and eCommerce. Online travel spending has been spared the downturn, recording 12.75 per cent growth YoY and 6.49 per cent since Q2.
The report notes that the consistent factor leading the decline in each state was retail spending, with only Queensland bucking the trend as its travel sector drove an overall YoY increase.
Airwallex’s Australia and New Zealand Vice President of Growth, Matt Sek, said that the upcoming Q4 would typically see an upswing in digital spending as Australians take advantage of the peak sales season.
“Official data shows Australians have collectively around $250-300 billion in their savings accounts. Savvy businesses will seek ways to maximise the upcoming sales season to get customers spending again,” Sek said. “Australians have been spooked by the economic environment over the past 12 months but as things have stabilised we can see they’re taking the time to do their research and hunt for the best bargains before they part with their hard-earned cash.
“As business revenue has declined, companies have been pulling back on their own spending, with digital and technology spending dipping 1.29 per cent YoY driven by lower online advertising,” Sek added. “It shows businesses are looking carefully to maximise the return on investment from each dollar they spend.”
The latest Digital Economy Index suggests that Australians are taking a collective big breath before the usual uptick in spending and activity normally seen in Q4 each year.
“The businesses that do the best over the next three months will be the ones that find the savings and efficiencies in their cost base to offer the sorts of discounts and deals Australians are used to during peak sales season,” Sek said. “There’s a sense of optimism that the signs are there for a spending turnaround and online businesses are keen to learn how they can replicate the success and resilience the travel sector has seen.”
