Australia's $69 Billion eCommerce Boom: Key Insights from the 2025 Australia Post Report

March 20, 2025

Australia's eCommerce landscape is evolving rapidly, and 2024 is set to be a record-breaking year for online shopping. The latest Australia Post eCommerce Report for 2025 provides an in-depth analysis of this digital transformation, revealing that Australians spent an unprecedented $69 billion online last year. This milestone highlights the growing reliance on digital channels amidst changing consumer expectations, economic pressures, and advancements in technology.

In this article, we will unpack key insights from the report and explore how Australian businesses can leverage these trends to remain competitive in a crowded marketplace.

Record-Breaking Online Spending: A $69 Billion Milestone

The most noteworthy figure from the report is the total online spending, projected to reach $69 billion in 2024. This indicates a continued rise in digital retail. Although Australia’s economic conditions in 2024 were characterized by ongoing cost-of-living pressures, consumers still gravitated towards online platforms for their convenience and value.

Growth was particularly robust in categories where Australians sought essentials and affordability, including health and beauty, home and garden, and fashion. Notably, marketplaces like Amazon and eBay, along with local platforms, captured a larger share of this spending, highlighting the increasing dominance of multi-vendor environments.

The Marketplace Momentum

Marketplaces have become a major part of online shopping, showing double-digit year-on-year growth in transactions on platforms like Amazon, eBay, Catch, and Kogan.

So, why are consumers turning to these marketplaces? Here are a few key reasons:

• Price comparison and perceived value: with many listings aggregated in one place, shoppers can easily find competitive prices.
• One-stop shopping convenience: marketplaces offer a wide variety of products, reducing the need for consumers to visit multiple websites.
• Streamlined delivery and returns: these platforms typically have strong logistics networks, providing shoppers with faster and more reliable shipping options.

For Australian merchants, joining these marketplaces is becoming essential to reach a broader audience.

Consumer Behaviour Shifts: Gen Zs and Millennials Lead the Charge

The report highlights a clear divide between generations. Gen Z and Millennials are the most active online shoppers, with Gen Z expected to accelerate their spending the most over the next 12 months. These younger generations prioritize personalization, sustainable products, and fast, flexible delivery options.

Some key trends among these generations include:

• Social commerce: Influencer marketing and shopping directly through social media platforms are gaining popularity, particularly among Gen Z.
• Sustainability focus: Both Gen Z and Millennials are actively seeking eco-friendly products and brands that are committed to ethical practices.
• Frictionless checkout: Seamless checkout experiences, including digital wallets and buy-now-pay-later (BNPL) services, are essential for minimizing cart abandonment..

Retailers who overlook these preferences risk losing their relevance in an increasingly competitive market.

Delivery Expectations: Free, Fast, and Flexible

One of the most persistent trends highlighted in the Australia Post report is the increasing demand for free shipping. More than half of online shoppers now expect free delivery as a standard offering, and many are willing to spend more to access this benefit.

Other delivery expectations that are shaping eCommerce include:

• Out-of-home collection: Parcel lockers and click-and-collect options are becoming increasingly popular, particularly in urban areas where home delivery may not always be convenient.
• Same-day and express shipping: Although still less common than standard delivery, same-day and express shipping options are becoming important differentiators, especially in metropolitan regions.
• Simplified returns: Easy return policies significantly influence purchase decisions, with many shoppers preferring retailers that offer hassle-free and low-cost returns.

For eCommerce businesses, this means investing in a well-integrated logistics strategy that combines fast fulfillment, flexible delivery options, and clear communication with customers.

Personalisation and AI: The New Normal

A key takeaway from the report is the growing impact of personalisation and AI-driven experiences. With data analytics and artificial intelligence becoming increasingly accessible to small and medium-sized businesses, personalised product recommendations, dynamic pricing, and predictive inventory management are now becoming standard practices.

The advantages are evident:

• Higher conversion rates: Customised content and offers lead to increased engagement and sales.
• Customer loyalty: Personalisation enables businesses to build stronger relationships with their audience, resulting in repeat purchases and higher customer lifetime value.
• Operational efficiency: AI assists retailers in forecasting demand, optimising pricing, and reducing overhead costs.

As the adoption of AI continues to grow, brands that invest in intelligent technologies today will be better positioned to provide the seamless, customised experiences that shoppers increasingly expect.

Sustainability: From Buzzword to Business Imperative

Sustainability is now a major concern for consumers and a key factor in purchasing decisions, particularly among younger Australians. The report highlights that more shoppers are actively looking for brands that prioritize eco-friendly practices.

The primary sustainability priorities include:

• Reduced packaging waste
• Offering carbon-neutral delivery options
• Using products made from recycled or sustainable materials

Businesses that adopt green practices not only contribute to environmental efforts but also foster greater trust among customers who are increasingly motivated by values-based purchasing.

Regional vs Metro Trends

Regional Australia demonstrates a strong interest in online shopping, although metropolitan areas still account for a larger total spending. The report notes that shoppers in regional areas often face a lack of express delivery services, presenting an opportunity for businesses to enhance fulfillment and logistics in these regions.

Economic Pressures Driving Value-Conscious Spending

Cost-of-living pressures are a primary concern for Australian households. The report indicates that shoppers are becoming more value-conscious, actively seeking out discounts, loyalty rewards, and promotions before making purchases.

This frugal mindset is leading to:

• Increased use of marketplaces where competitive pricing is common.
• Greater sensitivity to delivery costs, highlighting the importance of free shipping incentives.
• Higher interest in Buy Now, Pay Later (BNPL) services, particularly among younger demographics experiencing financial pressures.

For merchants, it will be essential to develop promotional strategies and loyalty programs that reward long-term customers in the months ahead.

Emerging Niches and Opportunities

The report highlights several emerging opportunities for Australian businesses:

• Second-hand and recommerce: Online platforms that facilitate the sale and rental of second-hand goods are on the rise, as consumers increasingly embrace the circular economy.
• Subscription models: Recurring delivery services for essentials and niche products are gaining traction, providing businesses with stable revenue streams.
• Cross-border eCommerce: Australian consumers are showing a growing willingness to shop internationally, particularly from well-known overseas marketplaces.

What’s Next for Australian eCommerce?

Looking ahead, Australia Post expects continued growth in online retail, although at a more moderate pace compared to the rapid expansion seen after the pandemic. Key differentiators will include innovation in last-mile delivery, AI-driven personalization, and sustainable practices.

Businesses that want to thrive in 2025 and beyond will need to adapt to customer expectations regarding speed, convenience, and alignment with their values. Additionally, leveraging new technologies to streamline operations will be essential for success.

How Merchants Can Prepare

To future-proof your eCommerce business, consider these action points:

• Optimise for marketplaces: Utilize marketplace platforms to expand your reach and diversify revenue streams.
• Invest in AI and personalisation: Implement tools that provide tailored shopping experiences and streamline backend processes.
• Enhance delivery options: Collaborate with fulfillment providers to offer fast, flexible, and affordable shipping solutions.
• Strengthen sustainability credentials: Adopt eco-friendly packaging and explore partnerships for carbon-offset shipping.
• Engage younger consumers: Develop social commerce strategies and create frictionless checkout processes to attract Gen Z and Millennial audiences.

Final Thoughts

Australia's eCommerce sector is navigating a complex landscape of rising consumer expectations, economic uncertainty, and technological advancements. The 2025 Australia Post eCommerce Report makes one thing clear: businesses that prioritize customer-centricity, innovation, and operational agility will be best positioned to capture market share in this rapidly evolving environment.

For a deeper dive, you can view the full Australia Post report here.