Online spend drops while turnover jumps

New research by payments fintech Airwallex has found that Australians are spending less online than last year, with products being replaced by experience. It’s a mixed picture around the country as some states saw increases in online spend while others fell behind.

The first Digital Economy Index released by payments fintech Airwallex shows Australian digital businesses have seen their annual turnover jump by up to 13 percent, even as the overall online spending dropped by more than $124 million nationwide.

The Index estimates that online businesses in New South Wales have seen a 12.94 percent jump in turnover over the last year, followed by those in Queensland with a 6.14 percent jump attributable to travel and Tasmania similarily experiencing travel related growth at 1.9 percent.

Unfortunately, online businesses in Victoria saw a 25 percent hit to turnover, South Australia was down by 13.6 percent, and Western Australia by 36 percent.

Travel and education courses have seen a rise in the past year, with online tourism spending rising 207 percent. According to the research, Victorian online businesses slumped from a lag in attracting the education dollar, while the SA and WA declines appear to be driven by lower tourism spending.

Education has risen to 95.7 percent as people turn to online courses to broaden their horizons.

Airwallex Director of Strategy for ANZ, Amelia Hamer said the Digital Economy Index showed spending was flat with online businesses in Australia with a slight 0.07 percent  annual decline, which highlighted they were holding up in the face of a negative economic outlook.

“Online businesses are holding more strongly than other parts of the economy but the data shows they aren’t immune from the economic headwinds the world is facing,” Ms Hamer said.

“The message from this data is if you’re going digital, you’re generally going strong. Especially compared to businesses that aren’t part of the digital economy where we’ve seen online business growth outpace the latest ABS data on turnover in almost every category, except retail trade or ecommerce. The figures indicate the post-COVID economic recovery is patchy, in full swing across some areas while South Australia and WA, as well as Victoria, continue to struggle.

“There’s an alarm bell for some businesses that rely on international purchases, with the Index highlighting they’ve dropped by 6 percent since last year, but domestic online consumption has made up for it. Local businesses are increasingly becoming Australians’ first choice for online shopping.”

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