Local online retailers dominate Christmas but offshore spending on the rise

The majority of Australians purchasing goods online are doing so through domestic retail outlets, which experts say should relieve fears from giants such as Harvey Norman and David Jones, although overseas spending continues to grow.

The comments come after payments group PayPal said yesteray some of its clients received a sales boost over the Christmas period, indicating more Australians are keen to spend their money at domestic online retailers.

PayPal Australia referenced Forrester Research that shows 70% of purchases made online are spent on domestic retailers, and said clients Dan Murphy and Toys ‘R’ Us recorded some of their best Christmas sales ever.

Separate research conducted over the past few years also indicates the majority of spending is being directed to local retailers,

Telsyte senior research manager Sam Yip told SmartCompany this morning there is certainly enough evidence to show the majority of Australians who purchase goods online are doing so from local retailers.

“If you look at physical products, then most of the dollars spent will be for Australian retailers. But if you include digital purchases as well, then most sales will be for overseas.”

“People are spending more. The key here is that there are many opportunities for people to buy online and not just from the large online retailers.”

Yip points to smaller online retailers, along with larger entrants such as Harvey Norman, saying Australian shoppers are keen to buy from local shops.

“There are plenty of new opportunities for Australians to buy online locally, and you have a lot of companies like Harvey Norman doing new things with direct importing.”

Forrester Research analyst Steven Noble agrees, saying “it isn’t a zero-sum game”.

“The only losers here are the laggards, it’s certainly our view spending is going to domestic online retailers.”

Dan Murphy’s said yesterday it recorded a spike for online sales in December, while Toys ‘R’ Us said it reached a spike in sales around December 5, saying that it recorded significant growth in traffic.

But there’s a catch. Yip says an increasing amount of money is being sent to offshore retailers; a trend that will continue with more Australians coming online.

“So the trend is that there are a majority of dollars that are going to domestic retailers, but overseas are still growing. And that’s only going to continue.”

“If you look at digital purchases, then most sales are going overseas, and that figure is only going to grow.”