Spotlight April hero image
eCommerce Spotlight April

The momentum continues

Quarter one 2021 (Q1 21) saw online spending of $1.47b, up 27% on the same quarter in 2020 and up nearly 50% on the equivalent period in 2019. This growth is up there with the sort of accelerated quarterly growth numbers we saw throughout 2020. It seems the love affair with online shopping continues. Retail shopping growth, across both online and instore, was a more moderate 5% up on the same quarter last year.

Covid-19 lockdowns were a factor in shopping spend numbers for the first quarter of both 2020 and 2021. Late March 2020 was when the first, and nationwide, lockdown came into effect. This hit retail stores hard and many were fully closed until they could activate an online platform. Q1 21 saw a couple of short lockdowns for Auckland and, while there was definitely an impact, the overall feeling is that both retailers and consumers were better prepared for these.

Line graph Jan-March 2021 online spend

As anticipated, February’s lockdowns saw an immediate spike in online shopping, led by Health & Beauty products, Homeware, Appliances & Electronics, Clothing & Footwear and Department, Variety & Miscellaneous Retail goods. And of course, there was another rush on food and liquor as Aucklanders stocked up in preparation for yet more time in lockdown.

In each edition, we look at the three key factors that drive online spend – the number of shoppers, how often they spend and how much they spend each time.  


Quarter one 2021 (Q1 21): 

Milllion shoppers online
Transactions per customer
Average basket size

The number of shoppers online appears to have plateaued. In fact, there were about 1,000 less Kiwis shopping online compared to this time last year. Interestingly, 62,000 shopped online in this quarter for the first time, suggesting that a number of existing shoppers didn’t shop. Overall basket size remains about the same (1% up) however new shoppers seem to be entering the online world at the higher price point, with their basket size at nearly $140.

What is driving this quarter’s growth is a huge increase in transaction numbers. Online shopping has become the ‘way we shop’ for many Kiwis and they are buying online more often and across more sectors. In Q1 21 there were 13.7m online transactions, that’s up 25% (over 2.75m transactions) on the same period last year and 33% up on the same period in 2019.

The two sectors that show the biggest growth over the same quarter in 2020 were Clothing & Footwear (up 40%) and Department, Variety & Miscellaneous Retail (up 32%). Surprisingly, these weren’t the sectors that led the way in 2020. Homewares, Appliances & Electronics (up 31%) and Specialty Food, Groceries & Liquor (up 28%) both continued their strong run from last year. After a disappointing 2020, Recreation, Entertainment, Books & Stationary is making a comeback, up 6% on Q1 20. 2020’s other disappointing performer, Health & Beauty, continues to see a decline in shoppers, transactions and spend.


Quarter one 2021 (Q1 21):

growth over Q1 20
Buy Now Pay Later
growth over Q1 20
Local online spending

While we continued to see the ‘buy local’ trend we saw last year, it was a good start to 2021 for international spend, well up on the equivalent quarter in both 2020 and 2019. Clothing & Footwear and Department, Variety & Miscellaneous Retail benefited the most with both sectors seeing international spend over 20% higher than the year before.

The North Island regions that lead the growth in 2020 continued to see good growth at the start of this year. Gisborne was up 44%, Northland up 32%, Hawkes Bay up 32% and Taranaki up 29%. What is most pleasing to see is the strong growth in South Island regions like Southland (32%), Nelson (37%), Tasman (29%) and Marlborough (27%).

A key trend in 2020 was the rise of the older demographic online and that continues in Q1 21. Shoppers 60 and over grew by over 15% and their spend was up over 25%. Under 30s also had a strong quarter, growing their spend well over 35%. But it’s still the 30-59s who dominate online shopping. They continue to spend more often, and across more sectors, with transactions up over 25% on Q1 20.

Digital Boost

Video Case Study

The Government’s digital initiative – Digital Boost – was launched to help Kiwi businesses adapt to, and benefit from, continual advances in technology.

MBIE’s Lisa Casagranda, Director of Better for Business, talks to us about Digital Boost, what they found when they researched over 2200 Kiwi businesses and the tools and support Digital Boost offer retailers to grow their business.

The global opportunity

An interview with Jared Handcock, NZ Post's International Product Manager

Jared Handcock opens up with, “Don’t be scared. It’s not as difficult as you may think.” That’s his advice to online retailers thinking about promoting their products to customers beyond New Zealand. “Online shopping is borderless,” he says, “and that means there are people right around the world looking for unique products. New Zealand’s reputation for quality and innovation puts Kiwi retailers in a great position to capatalise on this.”


Despite all the disruptions in international supply chains due to Covid-19, the opportunity to find global customers got even bigger in 2020, with NZ Post handling over 8.6 million packages destined for overseas shoppers. That’s over 3.7 million kilos of product.  And where are all these products being shipped to? It seems all over the world, with NZ Post delivering goods to over 150 countries in 2020. The key markets are Australia, UK and the US.  Handcock says, “These are easier markets for Kiwi retailers to get into because of the common language, lifestyle and preferences.”  But these aren’t the only countries experiencing growth. Japan and China have seen a steady rise especially in natural goods like honey, skincare and wellbeing products.  A similar range of products are driving strong growth in parts of the Middle East.  

Handcock sees Australia as the easiest opportunity for retailers. “Kiwi retailers should see customers in Australia the same way they see inter-island customers.”  Australian shoppers are embracing online, with growth of over 50% in 20201. The most popular Kiwi goods include baby clothes, activewear, arts and crafts and wellbeing products. 

NZ Post’s GoAustralia product taps into the local Australian delivery network, meaning that for most Aussie shoppers delivery times are the same, or better, than buying locally. Handcock’s advice is, “Be open and transparent that a product is coming from New Zealand and be very clear what your returns policy is so customers feel comfortable to test you out.”

Customers in the UK are finding it much easier to buy from Kiwi retailers since changes to how VAT is handled. British customers are looking for quality, often buying products like woollen baby clothes, sheep skins and knitwear.  “There’s also a steady stream of Kiwiana purchases,” Handcock points out, “with lollies, biscuits, chocolates and other slices from home being shipped to ex-pat Kiwis.”

UK has one of the highest rates of online shopping in the world so delivery expectations are high. NZ Post’s GoUK product links into the extensive local 24-hour delivery network, meaning that most packages get there well within ten days. During lockdowns in 2020, NZ Post saw a rise in door-to-door delivery to the UK, with customers paying more to ensure faster, and more certain, delivery times.

The US is a little more complex but many small Kiwi businesses, across a number of sectors, have found opportunities throughout the country. “Shopper preferences and behaviours change from the east to the west coast, and mid-America is different again,” points out Handcock. “Regardless of location, Americans are used to buying online and managing their expectations is crucial. Ensure you have a number of delivery options.” He also advises retailers to be very accurate in their customs descriptions as this is a key reason for shipping delays into the US.

NZ Post’s GoUSA products connects with local delivery networks ensuring coverage everywhere and a delivery experience customers are used to. 

Jared Handcock sums up by pointing out how fast online shopping is growing. “Kiwis are buying from all over the world. Kiwi retailers have to approach their business the same way, seeing the whole world as potential customers.” He reinforces, “It’s not as difficult as you may think,” and encourages retailers to talk to their NZ Post relationship manager about how to make the most of the massive global opportunity.

1Australian Post Online Shopping Review 2020

The data used for this eCommerce Spotlight is card transactional data supplied by Datamine.

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