Nielsen’s latest online retail report has found the number of people shopping online increased by over 100,000 in the last year, which equates to growth of six percent. And that means there are now 1.9 million New Zealanders shopping online, or 56 percent of the total online population.
Nielsen says New Zealanders spent $3.8 billion shopping online and it expects this to reach $4.15 billion by the end of 2014. And while there's obviously some major growth in e-commerce, it's still only a small chunk of the $70 billion spent on retail each year in New Zealand.
“Kiwis have well and truly embraced internet shopping," says Tony Boyte, research director, Nielsen. "The number of items each person is buying is increasing at a rapid rate. Nearly half a million Kiwis each made 11 or more purchases on the internet last year, an increase of 58 percent in the last two years."
Nielsen says $1.3 billion is spent by New Zealanders on websites based overseas, with USA, Australia and the UK being the most popular. 34 percent of the total amount Kiwis spent shopping online is spent overseas, an increase from 26 percent the previous year and double that of 2010.
The most popular products and services are airline tickets, with 44 percent of online shoppers purchasing from this category, followed by clothing/shoes/accessories (40 percent), books/magazines (35 percent), entertainment tickets (26 percent) and travel related services such as accommodation and car hire (25 percent).
“Consumers shop online for convenience, which includes being able to compare products and prices. It’s a trend that will continue to grow and with this, spend will increase substantially. A considerable proportion of spend will continue to go off-shore but the opportunity remains for New Zealand retailers to take advantage of growth in the online retail space.”
The BNZ's online retail report for April showed that online sales were up 11 percent on last April, while traditional retail sales were up by 3.1 percent.
“We are seeing spending increase both online and on the high street. It paints a pretty good picture of New Zealand consumer confidence," says Stephen Bridle, Marketview.
While still on the up, it says the online growth rate has slowed considerably from the heights of 2011 and 2012.
One of the major issues with e-commerce from the retailers' perspective is that consumers are often looking overseas due to the major price differences (and, in some cases, tax advantages). Domestic retailers grew at six percent year on year, while the annual growth in online purchases from merchants overseas lifted to 17 percent in April. The split is currently around 60/40 in favour of domestic online retailers, although the gap is closing.