E-commerce, a trend that has dramatically grown in popularity during the pandemic, could represent 10% of retail spending in just three years.
Australia was traditionally behind countries such as China and the US in terms of e-commerce penetration but there had been a rapid uptake of the service during lockdown as people were forced to work and educate children from home.
Australia Post said e-commerce use was up 80% year-on-year in the two months since COVID-19 was declared a pandemic on 11 March and 200,000 people shopped online for the first time in April.
Ben Franzi, general manager parcel and express services at Australia Post, said: “April 2020 was a historic month as online shopping fully ramped up again. More than 200,000 new shoppers entered the market and purchased something online for the first time and over a third of new shoppers made multiple purchases.
“Seasoned shoppers also increased their purchase frequency with over half of them buying online more than twice in April 2020. This speaks to a high level of engagement in the market and cementing the new trend in buying online.”
According to UBS, this rise in e-commerce would have implications for property funds as it could lead to increased need for warehouses and logistics centres.
“We expect e-commerce penetration for groceries to reach 10% by 2024 (currently 3%) and ex-grocery to reach 17% (9% in FY19). We estimate this will drive potential incremental demand 0.8-1.0 sqm which is 2x the 10-year average for take up from retailers,” the investment bank said.
“[There is a] shift to e-commerce as supply chains adapt and logistics operators adjust to changing consumer behaviour. In Australia, respondents expect to grow warehouse space needs by 7.5%.”
It suggested investing in stocks such as Brickworks and Goodman Group as well as Centuria Industrial REIT.
According to FE Analytics, the best performing of those was Goodman Group which had returned 38% since the start of the year to 31 August.
