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Businesses should ensure their digital strategies allow them to capitalise on the uptick in consumer confidence, Airwallex says.
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Online spending up $200 in ‘strong finish’ to 2023
17 January 2024
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10 minute read
Consumers spent nearly $200 more on average online last year thanks to a surge in the final quarter of 2023, indicating a “return to online spending growth”, according to Airwallex.
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The cross-border payments company’s Digital Economy Index estimated consumer digital spending increased 3.3 per cent to $6,055 per person last year, with businesses in e-commerce, travel and finance as the best performers.
Australia and New Zealand managing director Luke Latham said consumers were “relaxing” after a year of spending restraint in the face of cost-of-living pressures.
“Australia’s digital economy finished 2023 in a solid position with a strong $200 uptick in per person spending,” Mr Latham said.
“Across all sectors there’s a lot of optimism that the signals we’ve seen towards the end of 2023 indicate a return to online spending growth.”
Digital businesses in e-commerce, travel, finance and insurance saw the greatest quarterly change in spending off the Black Friday and Boxing Day sales during the December quarter.
E-commerce jumped by 20 per cent and was up nearly 4 per cent compared to the same period in 2022.
Online spending on travel, finance and insurance increased about 8 per cent last quarter, a yearly change of 3.6 per cent and 7.6 per cent respectively.
However, businesses in the “digital and technology” category saw a quarterly drop of 13.4 per cent while online turnover for education businesses was also down nearly 6 per cent.
“With e-commerce, travel and financial and insurance spending driving the increases, it’s clear Aussies are letting their hair down a bit while also making sure they’re investing for a rainy day,” Mr Latham said.
Spending in Queensland changed the most, up 18 per cent or $432 to a yearly spend of $2,827 per adult. This was followed by Tasmania which saw a 12.4 per cent or $137 jump to $1,244 on average.
While consumers in NSW spent more than consumers in any other state, averaging $9,826, it was still $211 less than the $10,037 spend recorded in 2022 (down 2.1 per cent).
Similarly, consumers in Victoria and South Australia also cut spending by around 2 per cent and 13.5 per cent respectively.
“Interestingly, the spending pattern was inconsistent across the country, highlighting that the hip pocket pain from mortgage increases and inflation are likely being felt most keenly in NSW, Victoria and South Australia and deterring spending,” Mr Latham said.
Airwallex’s latest data reversed the less favourable trends observed at the end of Q2 2023, which showed consumers spent $600 less on average compared to the year prior.
Spending had retreated in most states, including Victoria (-5 per cent), South Australia (-6 per cent), Queensland (-7.5 per cent) and NSW (-8 per cent).
Mr Latham said businesses with established online strategies would be best placed to make the most of returning consumer confidence in 2024.
“Now’s the time for businesses to be looking closely at the online experience for their customers as well as the platforms and partners they use to reach new customers,” he said.
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