A spending downturn in the retail and e-commerce sector drove a $2.9 billion YoY nation-wide drop in online spending, according to the Q3 Digital Economy Index from global financial platform Airwallex.
The quarterly Airwallex Digital Economy Index “records year-on-year and quarter-on-quarter snapshots of the digital economy by state and industry.”
The Index highlights online spending has “dipped YoY across all sectors from 1.29 per cent for the digital and technology sector, to nearly 7 per cent for education, 7.9 per cent for insurance and self-managed investments and 8.02 per cent for retail and e-commerce.”
Online travel spending has been “spared the downturn, recording 12.75 per cent growth YoY and 6.49 per cent since Q2.”
The consistent factor leading the decline in each state was retail spending, “with Queensland bucking the trend as its travel sector drove an overall YoY increase.”
Airwallex’s Australia and New Zealand Vice President of Growth, Matt Sek, said the upcoming Q4 would typically see “an upswing in digital spending as Australians take advantage of the peak sales season.”
Sek said.
“Official data shows Australians have collectively around $250-300 billion in their savings accounts. Savvy businesses will seek ways to maximise the upcoming sales season to get customers spending again. Australians have been spooked by the economic environment over the past 12 months but as things have stabilised we can see they’re taking the time to do their research and hunt for the best bargains before they part with their hard-earned cash.”
As noted in the update:
“As business revenue has declined, companies have been pulling back on their own spending, with digital and technology spending dipping 1.29 per cent YoY driven by lower online advertising. It shows businesses are looking carefully to maximise the return on investment from each dollar they spend. The latest Digital Economy Index suggests Australians have been taking a collective big breath before the usual uptick in spending and activity we see in Q4 each year. The businesses that do the best over the next three months will be the ones that find the savings and efficiencies in their cost base to offer the sorts of discounts and deals Australians are used to during peak sales season.”
As covered, Airwallex is a global financial platform for modern businesses, offering trusted solutions to manage everything from payments, treasury, and spend management to embedded finance.
With proprietary infrastructure, Airwallex claims it “takes the friction out of global payments and financial operations, empowering businesses of all sizes to unlock new opportunities and grow beyond borders.”
Founded in Melbourne, Airwallex supports “over 100,000 businesses globally and is trusted by brands such as Brex, Rippling, Navan, Qantas, SHEIN and many more.”