Navigating Ecommerce Trends: A Guide for Australian Brands

 

Australia's e-commerce sector continues to thrive in 2025, driven by post-pandemic normalization, rising digital adoption, and evolving consumer demands for convenience, value, and sustainability. The market is projected to reach US$42.22 billion in revenue this year, with user penetration at 69.2% and an average revenue per user (ARPU) of US$2,309. Overall, the sector is expected to grow at a CAGR of 8.2%, hitting US$69.54 billion by 2029. In 2024, online spending reached AU$69 billion—a 12% increase year-over-year—with 9.8 million households (up from 8.2 million in 2019) actively shopping online. Amid cost-of-living pressures (affecting 93% of Australians), consumers are shifting more spend to online channels for better deals, with marketplaces like Amazon and eBay driving 39% of growth, totaling $16 billion.

Regional areas are outperforming metros in online activity due to limited physical retail access, while generational divides shape behaviors: Gen Z favors social and mobile shopping, while Baby Boomers prioritize trust and simplicity. Below, we break down the top trends shaping the industry.

Key E-Commerce Trends in Australia for 2025

Trend	Description	Key Stats/Insights	Implications for Businesses
Mobile-First Commerce (M-Commerce)	Shoppers increasingly use smartphones for on-the-go purchases, with platforms optimizing for seamless mobile experiences.	Mobile commerce will account for 59% of global retail e-commerce sales (over $4 trillion), with similar adoption in Australia. 71% of Australians prioritize transparent delivery info on mobile checkouts.	Adopt mobile-optimized sites and apps; integrate quick-scan payments like digital wallets (preferred by 54% of consumers).
AI-Driven Personalization	AI enhances customer interactions through recommendations, chatbots, and predictive analytics, shifting e-commerce to "experiential commerce."	AI boosts basket values via hyper-personalized suggestions (e.g., outfit recommendations); 77% of consumers demand real-time order tracking powered by AI. Emerging regulations may govern AI use.	Invest in AI tools for dynamic pricing and service; balance innovation with privacy to build loyalty.
Social Commerce Boom	Buying directly via social platforms like TikTok and Instagram, blending entertainment with shopping.	Intensifying marketplace competition; TikTok ad strategies are reshaping organic search. Young Australians (Gen Z) lead with value-seeking via social influencers.	Leverage short-form video ads and shoppable posts; monitor paid search shifts for 2025.
Sustainability & Recommerce	Eco-friendly practices, including sustainable packaging and second-hand marketplaces, appeal to value-conscious buyers.	Second-hand market valued at $60 billion (2022 baseline, growing); 71% prioritize clear sustainability goals. Home & Garden category leads but saw -7.6% YoY decline.	Highlight eco-credentials in listings; partner with recommerce platforms to reduce waste and attract regional shoppers.
Cross-Border Expansion	Australian brands target global markets, with consumers shopping internationally despite economic uncertainty.	54% of global consumers plan to increase international spending; Australian merchants handle 25% of e-commerce transactions cross-border.	Use fintech for seamless payments; focus on logistics like Australia Post for reliable international delivery.
Payment Innovations	Shift to digital wallets, BNPL (Buy Now Pay Later), and A2A transfers for frictionless checkouts.	Digital wallets lead preferences, followed by BNPL; fintech growth supports real-time payments. Debit cards popular among cautious young spenders.	Integrate diverse options (e.g., Visa, Afterpay); prepare for blockchain and crypto pilots.
Fast & Transparent Delivery	Emphasis on speed, tracking, and clear costs, with gig-economy players challenging traditional couriers.	71% rank delivery charge transparency highest; real-time tracking demanded by 77%. Uber Eats expanded regionally, adding 2,500 jobs.	Partner with providers like Australia Post or Sherpa for 75% coverage; combat device downtime (16 hours/month lost per employee).
Omnichannel & Returns Management	Blending online/offline with easy returns to combat fraud and boost trust.	Returns fraud cost retailers $103 billion globally in 2024; omnichannel strategies unify inventory across channels.	Implement fraud detection AI; offer flexible returns to retain 61% of trust-focused shoppers.
Marketplace Dominance	Platforms like Amazon drive growth, with intensifying competition.	Marketplaces fueled 39% of 2024 spend growth; peak season more complex due to international rivals.	Optimize listings for SEO and paid search; diversify beyond single platforms.
Regulatory & Tech Challenges	Bans on facial recognition and rising data protection demands amid tech disruptions.	Kmart's facial recognition halt signals global pushback; stricter supply chain transparency required.	Ensure compliance with AI regs; invest in robust mobile devices to minimize downtime.

Challenges and Opportunities

While growth is robust, challenges include returns fraud escalation, supply chain opacity, and economic caution—leading to a 21% MoM revenue dip post-holidays in early 2025. Opportunities lie in regional targeting (higher engagement) and events like Online Retailer 2025 conference for networking. Businesses succeeding in 2025 are those prioritizing agility, data-driven personalization, and customer-centric logistics.

AI personalization examples

AI-driven personalization is transforming Australian e-commerce by tailoring experiences to individual shoppers, boosting engagement, and increasing conversions. Below are key examples of how AI is applied for personalization in the Australian e-commerce landscape in 2025, with practical use cases and their impact.

Examples of AI-Driven Personalization in Australian E-Commerce

Example	Description	How It Works	Australian Context & Impact
Product Recommendations	AI analyzes browsing history, purchase patterns, and preferences to suggest relevant products.	Machine learning models (e.g., collaborative filtering) use real-time data to display "You May Like" or "Frequently Bought Together" items on platforms like Amazon or Kogan.	Drives higher basket values; e.g., The Iconic uses AI to suggest outfits based on past purchases, increasing average order value by up to 15% for fashion retailers.
Dynamic Pricing	AI adjusts prices based on demand, user behavior, or competitor analysis.	Algorithms monitor market trends and user profiles to offer personalized discounts or surge pricing, e.g., on Catch.com.au during sales events.	Enhances competitiveness; 54% of Australian shoppers seek value-driven deals, making dynamic pricing effective during cost-of-living pressures.
Personalized Marketing Campaigns	AI crafts tailored email, SMS, or push notifications based on user data.	Tools like Salesforce or HubSpot segment audiences by behavior (e.g., cart abandonment) and send customized promotions, such as Myer offering discounts to loyalty members.	Boosts engagement; personalized emails have a 29% higher open rate in Australia, per 2024 marketing reports.
AI Chatbots & Virtual Assistants	AI-powered chatbots provide real-time, personalized customer support.	Chatbots on sites like David Jones use NLP to answer queries, suggest products, or guide sizing based on past interactions.	Improves CX; 77% of Australians value instant support, reducing cart abandonment by 20% for retailers with 24/7 chatbots.
Search Optimization	AI enhances search functionality with personalized results.	Algolia or Elasticsearch powers platforms like eBay Australia, prioritizing results based on user history or trending items in their region.	Increases conversions; personalized search results lift click-through rates by 10-15% for Australian marketplaces.
Content Personalization	AI curates website or app content, like banners or landing pages, to match user interests.	Platforms like Temple & Webster use AI to display home decor based on style preferences inferred from browsing data.	Enhances user retention; 61% of Australians prefer brands with tailored experiences, per 2025 e-commerce surveys.
Predictive Analytics for Inventory	AI forecasts demand to personalize stock availability.	Retailers like Woolworths use predictive models to stock items based on regional purchase trends, ensuring availability for online orders.	Reduces stockouts; critical for regional shoppers (higher online activity) who rely on seamless delivery.
Social Commerce Integration	AI personalizes shoppable content on social platforms like Instagram or TikTok.	Algorithms suggest products via influencer posts or ads based on user demographics; e.g., Cotton On leverages TikTok’s AI for Gen Z-targeted ads.	Drives sales; social commerce influences 30% of Gen Z purchases in Australia, per 2024 data.

Real-World Australian Examples

• Amazon Australia: Uses AI to recommend products based on browsing and purchase history, with features like "Inspired by Your Shopping Trends" driving 35% of its sales globally, with similar trends in Australia.
• THE ICONIC: Employs AI for outfit suggestions and sizing recommendations, reducing returns (a $103 billion global issue in 2024) by aligning suggestions with user preferences.
• Coles Online: Leverages AI for personalized grocery lists and promotions, analyzing past orders to suggest weekly staples, increasing repeat purchases by 12% in 2024.
• Afterpay: Integrates AI to offer personalized BNPL plans, assessing user spending habits to tailor payment schedules, appealing to 54% of Australians using digital wallets or BNPL.

Challenges & Considerations

• Privacy Concerns: With 71% of Australians prioritizing data transparency (2025 e-commerce reports), retailers must comply with regulations like the Privacy Act and avoid overstepping with facial recognition (e.g., Kmart’s 2024 ban).
• Tech Investment: Small retailers face barriers to adopting AI due to costs, though platforms like Shopify offer accessible AI tools.
• Balancing Personalization: Over-personalization can feel intrusive; 30% of shoppers abandon sites if ads feel "too targeted."

Why Does It Matters?

AI personalization drives loyalty in a competitive market where 93% of Australians face cost-of-living pressures, seeking value and convenience. Retailers adopting these strategies see up to 20% higher conversion rates and 15% larger basket sizes. For businesses, integrating AI tools via platforms like AWS or local providers (e.g., Adyen for payments) is key to staying relevant.

For more insights, check Australia Post’s 2025 eCommerce Report or explore case studies on platforms like Shopify Australia. If you’re a retailer, focusing on AI-driven recommendations and chatbots could be a quick win to boost engagement.

Payment Gateways in Australia (2025)

Australia's e-commerce payment landscape in 2025 is robust and evolving, with the total payments market projected to grow from $920 billion in 2024 to $1.97 trillion by 2029. Payment gateways act as secure intermediaries, processing transactions via credit/debit cards, digital wallets (e.g., Apple Pay, Google Pay), BNPL options (e.g., Afterpay), and bank transfers like the New Payments Platform (NPP) for instant payments. Key drivers include high mobile adoption (59% of e-commerce via smartphones), regulatory compliance (PCI DSS, 3D Secure 2), and fraud prevention amid rising cyber threats.

Popular methods: Debit cards (leading), credit cards, PayPal (used by 64% of online shoppers), and BNPL. Gateways must integrate seamlessly with platforms like Shopify, WooCommerce, and Magento. Businesses prioritize low fees (1.5-3.5% + fixed), fast payouts (1-3 days), and global support for cross-border trade (25% of transactions). With cost-of-living pressures, gateways offering transparent pricing and value-added features like dynamic pricing or AI fraud detection are winning.

Top Payment Gateways in Australia for 2025

Based on features, fees, integrations, and suitability for e-commerce, here's a comparison of the leading options. Fees are indicative (vary by volume/card type; always check providers for custom quotes). All comply with PCI DSS and support major cards/wallets.

Gateway	Best For	Key Features	Pricing (Domestic Cards)	Integrations
Stripe	Tech-savvy e-commerce & global businesses	API-driven customization, subscriptions, invoicing, fraud tools (Radar), NPP support. Accepts 135+ currencies.	1.75% + 30¢ per transaction; international +1%. No setup/monthly fees.	Shopify, WooCommerce, Magento, custom APIs.
PayPal	Consumer-facing online stores	One Touch checkout, buyer/seller protection, invoicing, mobile app. Supports 200+ countries.	2.6% + 30¢ (domestic); 3.49% + 30¢ (international). $19.95/month for advanced tools.	Shopify, eBay, WooCommerce; easy embed.
eWAY (Global Payments)	Small-medium businesses (SMBs)	Pre-authorization, tokenization, 250+ platform integrations, fraud screening. Australian-owned.	1.8% + 30¢ (standard); volume discounts to 1.2%. No setup; $0.99/month.	WooCommerce, Magento, Shopify, Xero.
Square	Hybrid online/offline retail	POS hardware, free online store, inventory/CRM tools, Afterpay integration.	1.6-1.9% + 10¢ (online); no monthly fees.	Shopify, WooCommerce; robust API.
SecurePay	Local Australian e-commerce	Comprehensive fraud detection, recurring billing, Australia Post integration for logistics.	1.9% + 30¢; custom for high volume. No setup/monthly.	Shopify, Magento, custom SDKs (PHP/.NET).
Airwallex	Cross-border & enterprise	End-to-end FX/payments, multi-currency accounts, no-code/low-code setups.	1.2-2.9% + FX markup (0.5-2%). Custom enterprise plans.	Shopify, accounting software (Xero).
Pin Payments	SMBs & startups	Transparent pricing, direct API, no lock-in contracts. Supports cards/wallets.	1.75% + 30¢. No setup/monthly.	WooCommerce, Shopify, custom.
Adyen	Large enterprises	Unified platform for online/in-store, dynamic 3D Secure, analytics.	Custom (1.2-3% + interchange). Volume-based.	Enterprise-level (custom).
ANZ Worldline	Bank-integrated & phone payments	eGate for online, EFTPOS terminals, over-the-phone processing.	Custom via ANZ (1.5-2.5% + fixed).	Bank systems, e-commerce plugins.
NOWPayments	Crypto-inclusive e-commerce	Supports 100+ cryptos, fiat gateways, low fees for digital natives.	0.5-1% for crypto; fiat as standard. No setup.	WooCommerce, Shopify.

Trends and Considerations for 2025

• BNPL Integration: 54% of Aussies use BNPL—gateways like Stripe/Square support Afterpay/Zip seamlessly, boosting conversions by 20-30%.
• Mobile & Wallets: Prioritize gateways with Apple/Google Pay (71% demand transparent delivery post-payment).
• Security & Compliance: All top gateways use AI for fraud (e.g., Stripe Radar cuts disputes 25%). Watch for SCA mandates.
• Challenges: Returns fraud ($103B global in 2024) and FX fees for cross-border (up 6% CAGR). Opt for NPP-integrated for instant local transfers.
• Choosing One: SMBs favor eWAY/Square for simplicity; globals pick Stripe/Airwallex. Calculate total cost (fees + integrations) against volume—e.g., $50K annual via 2% fee = $1K cost.

For tailored advice, review ACCC guidelines or test via free trials (most offer them). If scaling e-commerce, pair with AI personalization for 15% basket uplift. Sources include Statrys, NOWPayments, Wise, Shopify, and Airwallex reports.

BNPL Services in Australia (October 2025)

Buy Now Pay Later (BNPL) services have become a cornerstone of Australian e-commerce and retail, offering interest-free installment plans that allow consumers to split purchases over time. As of October 2025, the market is valued at approximately USD 19.5 billion, up from USD 13.05 billion in 2024, with projections to reach USD 42.23 billion by 2030 at a CAGR of 16.71%. BNPL accounts for nearly 10% of e-commerce transactions, driven by digital adoption, cost-of-living pressures, and younger demographics (e.g., Gen Z and Millennials). Usage spans essentials (groceries, healthcare) to discretionary items (fashion, travel), with 54% of Australians incorporating BNPL into their spending.

Major shifts occurred on June 10, 2025, with the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 reclassifying BNPL as "low-cost credit contracts" under the National Consumer Credit Protection Act 2009. This mandates providers to hold Australian Credit Licences (ACL), join the Australian Financial Complaints Authority (AFCA) for dispute resolution, and comply with modified responsible lending obligations (RLOs)—including credit checks for purchases over $2,000. While enhancing consumer protections (e.g., clearer disclosures, hardship assistance), these rules have stabilized the market, reducing debt risks but increasing operational costs for providers.

Top BNPL Providers in Australia (2025)

The market is dominated by a mix of local fintechs, global players, and bank-backed options. Afterpay (Block Inc.) leads with the highest brand awareness and user base, followed closely by Zip. Market concentration is high, with the top five controlling ~80% of transactions. Below is a comparison based on key features, fees, and suitability.

Provider	Key Features	Repayment Options	Fees & Limits	Market Share Insight
Afterpay (Block Inc.)	Seamless app integration, virtual cards, in-store/online; AI-driven limits.	4 interest-free payments over 6 weeks; longer plans up to 12 months.	Late fees: $10 (max $68/account); min. purchase $3, max $2,000 (increases with usage). No interest.	~40-50% share; highest awareness.
Zip	Flexible plans, global acceptance; Zip Pay (credit line) and Zip Money (longer loans).	4 payments over 2 weeks or up to 36 months (interest on longer).	Late fees: $7.50-$15; account fee $9.95/month for Zip Money. Min. $0, max $50,000.	~25-30%; strong in cross-border.
Klarna	One-time payments or financing; app-based shopping tools, price tracking.	Pay in 4 (6 weeks) or up to 36 months (interest 0-24.99%).	Late fees: $7 (max 25% of amount); min. $35, max $7,000.	~10%; growing via global partnerships.
PayPal Pay in 4	Integrated with PayPal wallet; global reach, buyer protection.	4 payments over 6 weeks.	No late fees (but account suspension); min. $30, max $1,500. No interest.	~8%; leverages PayPal's ecosystem.
Humm	Tailored for big-ticket items; humm90 for quick buys, Bundll for services.	3-120 months; interest-free up to 90 days.	Establishment fee $99 (waived sometimes); monthly $9.95. Min. $250, max $50,000.	~7%; expanding into non-retail.
CommBank StepPay	Bank-backed, no foreign fees; linked to CommBank app.	3 interest-free payments over 3 months.	No late fees; min. $100, max $2,000.	~5%; rising with bank integrations.
Sezzle	Loyalty rewards (10% cashback); eco-focus.	4 payments over 6 weeks.	Late fees: $10; min. $40, max $2,500. No interest.	~3%; niche growth.
Openpay (now defunct/merging)	Fixed installments; no credit checks for small buys.	3-24 months.	Late fees: 1.5% monthly; min. $100.	<2%; consolidating out.

Notes: Fees are indicative and exclude GST; all providers now require ACL compliance. Market shares are estimates from 2024-2025 data, as exact 2025 figures vary by source (e.g., Afterpay leads per Roy Morgan awareness surveys).

How BNPL Works in Australia?

• Checkout Selection: At participating retailers (online or in-store via app/QR), choose BNPL as payment.
• Approval: Soft credit check (no score impact for small buys); instant for most under $2,000. Post-June 2025, harder checks for larger amounts.
• Payment: Provider pays merchant upfront; consumer repays in installments (e.g., 25% upfront, rest fortnightly).
• Tracking: App notifications for due dates; auto-payments via linked bank/card.
• Post-June 2025 Changes: Mandatory monthly statements, credit reporting for defaults, and AFCA access for disputes.

Benefits and Risks

• Benefits: Interest-free for on-time payments; boosts spending power (average order value up 20-30%); builds credit history positively with timely use. Convenient for 93% of users facing economic pressures.
• Risks: Late fees accumulate (e.g., $68 cap per account); over-reliance leads to debt (23% of users missed payments in 2024); impacts future loans if reported. BNPL now appears on credit reports, potentially affecting scores.

Regulatory Landscape (Post-June 2025)

• Licensing: All providers must hold an ACL from ASIC and join AFCA by June 10, 2025. Transitional rules allowed applications until May 26, 2025.
• Responsible Lending: Modified RLOs require affordability assessments; caps on fees (e.g., no more than 5% establishment + 5% monthly on low-cost contracts).
• Consumer Protections: Clear disclosures, hardship variations, and bans on unsolicited offers. ASIC's RG 281 guides low-cost contracts.
• Impact: Reduced predatory practices but slowed growth to 8.5% CAGR (2025-2030); providers like Humm retired legacy products for compliant versions.

Trends and Future Outlook

• Expansion: Into healthcare, education, and agriculture (e.g., DelayPay for farmers); POS growth at 18.4% CAGR.
• Integration: With payment gateways (e.g., Stripe, Square) for seamless e-commerce; AI for personalized limits.
• Challenges: Consolidation (e.g., mergers post-2024); fraud risks amid $19B annual volume.
• Opportunities: Partnerships with banks/retailers; global players like Klarna eyeing 12% e-commerce share by 2028.

For businesses, integrating BNPL via Shopify or WooCommerce can lift conversions by 20%. Consumers: Use Moneysmart.gov.au for budgeting tips. Check ASIC's register for licensed providers. Sources include Mordor Intelligence, IMARC Group, ASIC, and RBA data.