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Online shopping in Aust growing rapidly


Online retail shopping in Australia is growing at an accelerated rate, and its local businesses that are reaping the benefits most.

The National Australia Bank's Online Retail Sales Index shows that online sales grew 26 per cent year-on-year to October, compared to 14 per cent year-on-year in May.

NAB chief economist Alan Oster said online sales were still only a small percentage of total retail spending at 5.6 per cent, but the rate of growth was accelerating.

The growth in online sales was also driven by domestic retailers which account for almost 75 per cent of the sales in the year to October.

Mr Oster said this showed the campaign to get overseas retailers to pay GST on goods worth less than $1000 was pointless and misguided.

Local retailers have been lobbying state and federal governments to make overseas retailers to pay GST on less expensive items, saying it would level the playing field.

"If online was driven by purely tax purposes then you would expect sales to be 80 per cent international and 20 per cent local and that's not true," he said.

"It is very difficult to argue that 20 per cent of the market is driving the whole market."

Over the past three years online shopping peaked in November as consumers bought their festive gifts early to ensure they would arrive in time for Christmas, Mr Oster said.

But with more domestic retailers now having websites and many guaranteeing goods will be delivered for Christmas if bought up until a week before, Mr Oster said the online shopping spike may come later this year.

NAB retail sector head Tiernan White said while the recent Click Frenzy event had issues, with shoppers unable to access sites, he believes there will be more online events in the future and it would not dent consumers' enthusiasm for internet shopping.

"Generally the impression we're getting from retailers is that it didn't quite work on the day, but it's an emerging market and something they should persevere with," he said.