Australia’s e-commerce sector increased by 113% between 2017 and 2022 to hit a total of $53 billion, according to a new report by property firm CBRE.

Titled Australia’s E-Commerce in the Post-Pandemic Era, the report shows that the rate of growth in online retail trade hit a record high of 15% in April 2022, and then dipped to a three-year low of 12.6% in March 2023.

Despite the slip, the online market has now stabilised at a rate that remains well above the annual average growth of 2.5% over 2017-2021.

“There are now more consumers buying online, with 82% of Australian households making an online purchase in 2022 versus 73% in 2018,” CBRE’s Australian head of industrial and logistics research Sass J-Baleh said.

“These are now ‘sticky’ consumers, who did not previously purchase online but were forced to during the pandemic and have a continued preference for this style of shopping.”

J-Baleh added that above-trend e-commerce penetration rates have also been recorded in emerging e-commerce markets such as Canada, Spain, Poland, Italy, Portugal and Turkey.

“However, we have also observed this in the US, where the e-commerce penetration rate is three years ahead of its pre-COVID trend,” she said.

According to the research, the home and garden sector led online sales in Australia in 2022, bolstered by a 21% hike in pet product sales, with food and liquor in second place.

On a state-by-state basis, Victoria is leading with a current penetration rate of 15%.

“Nationally, we expect that e-commerce penetration will continue to grow to a forecast share of 15% by 2027,” J-Baleh said. “In tandem, 1.1 million square metres of additional e-commerce dedicated logistics space will be required in Australia over the next four years to support the growth of internet sales.

“This will require us to unlock alternative space or to intensify the use of available space to meet demand, something that’s already occurring in the Sydney market with the development of multi-storey warehouses.”

According to CBRE, around 850,000 square metres of multi-storey floorspace is forecast to be delivered between 2023 and 2027, across 20 projects in Sydney, where rents are the most expensive in the country.

Almost 30% of this total floor space is currently under construction or has development approval.

“Fast delivery requires goods to be stored close to consumers in urban infill locations,” CBRE’s South Sydney managing director Nathan Egan said. “However, warehouse space is becoming limited in urban areas and land is becoming more expensive.

“One solution to limited space in urban areas will be the development of multi-storey warehouses to make use of the limited land available, whilst also being more cost-effective.”

comments powered by Disqus