In the 12 months to September, Australians spent an estimated $20.8 billion on online retail – a level that is equivalent to around 7% of the traditional bricks and mortar retail sector.

Homeware and appliances, takeaway food, and media experienced strong sales growth in the month.

Of particular interest is the growth in takeaway food, which had the fastest annual online sales growth in September. This category represents a rapidly evolving and innovative way of ordering food, supported by recent advancements in methods such as mobile phone applications.

According to National Australia Bank’s (NAB) latest Online Retail Sales Index in-depth report, online spending increased 14.2% over the last year.

“There has been a continuation of the shift back to growth in the large eastern states, and the significant slowing in online sales growth in WA. Victoria is leading eastern state growth in September. Over 76% of total online spending in the past year was made by residents from the three largest states (NSW, VIC and QLD),” NAB Chief Economist Alan Oster said.

NSW continues to have the largest share of online spend at 34.8%, followed by Victoria at 23.5% and Queensland at 18.2%.

Mr Oster also said that domestic retailers continued to show strength against international counterparts, accounting for about 80% of spending in September.

The September report also shows:

• By sector: Demand for media and takeaway food continues to dominate online spending growth. At 41.1% (year on year), takeaway food had the fastest annual online sales growth in September.
• By age: In the month, growth was fastest for those aged 65+ (2.1%), with this age cohort favouring online spend on food and liquor. Growth has also accelerated for the 18-24s, with spending patterns in this age demographic dominated by fashion (21.6%) and media (20.2%).
• By state: Over the past year, the contribution to growth in online spending has shifted back towards the eastern states. Around 76% of total online spending in the past year was made by residents in NSW, Victoria and Queensland. However on a per capita basis, residents in ACT, NT, WA and NSW spent more than the national average.

At 0.2%, smaller online retail sales recorded lower growth in September compared to the 6.9% spike recorded in August. Although slowing in trend terms after a period of higher than average growth, small online retail sales are still 21% higher compared to a year ago.

Smaller online retailers are defined as businesses with revenue of less than $2.5 million and are overwhelmingly represented by personal and recreational, homewares and appliances and fashion.

The NAB Online Retail Sales Index in-depth report is available at business.nab.com.au