eCommerce Adoption Rates Among Australian Small Businesses by Industry: The Shocking Truth Behind Digital Australia (2025)

Key Takeaways

• Only 39% of Australian SMEs generate meaningful revenue from online sales (vs 67% Asia-Pacific average)
• Retail leads with 65% of businesses receiving online orders, while agriculture lags at just 31%
• COVID-19 compressed 5 years of digital adoption into 8 weeks for many businesses
• 50% of small businesses still lack fundamental digital skills
• Digitally engaged businesses are 50% more likely to grow revenue and 8x more likely to create jobs

Introduction

Here’s a stat that’ll knock your socks off…

Despite Australia being one of the world’s most connected nations, our small businesses are getting absolutely smashed in the digital game.

While 9.8 million Aussie households are shopping online like there’s no tomorrow, only 39% of our SMEs are making decent coin from eCommerce. Compare that to our Asia-Pacific neighbours hitting 67%, and you’ll see we’ve got a serious problem on our hands.

But here’s the kicker… the businesses that have cracked the digital code are absolutely killing it.

Let’s dive into the real numbers behind Australia’s digital divide.

The Post-Pandemic Digital Shake-Up

When Crisis Became Catalyst

COVID-19 didn’t just change how we worked… it completely rewrote the playbook for Australian business.

In the first eight weeks of the pandemic, consumer and business digital adoption leapt forward by an estimated five years. That’s not a typo. Five. Bloody. Years.

The numbers are staggering:

• An additional 1 million households started shopping online each month in 2020
• 1.3 million households made their first-ever online purchase
• Online marketplaces grabbed 39% of all online spend growth in 2024

One alcohol delivery service reported over 50% week-on-week growth in active users during lockdowns. Meanwhile, businesses that already had their digital act together? They thrived while their competitors scrambled to catch up.

The pandemic didn’t create digital transformation… it exposed who was ready and who wasn’t.

The State-by-State Digital Divide

Where Your Location Determines Your Digital Future

Australia’s eCommerce landscape isn’t uniform. Geography matters more than you’d think.

The Digital Leaders:

• Western Australia: Leading year-on-year online purchase growth at 5.1%
• Northern Territory: Close second at 4.6% growth
• Victoria: Commanding 24.3% of national eCommerce market share

Business Confidence by State:

• 88% of WA retailers believe state laws facilitate business
• 75% of NSW retailers are optimistic about consumer spending
• Only 36% of SA retailers feel positive about economic conditions

Rural and remote areas are driving the biggest growth in online purchases (6.4% and 5.7% respectively), but here’s the twist… while country consumers are shopping online like crazy, regional small businesses are struggling to keep up.

It’s creating a bizarre situation where rural Aussies are buying from city businesses instead of supporting local enterprises that haven’t gone digital yet.

Industry Breakdown… The Winners and Losers

The Digital Champions

Retail Trade leads the pack with 65% of businesses receiving online orders in 2019-20. But even in retail, there’s a massive gap between having an online presence and actually making money from it.

Online retail sales hit $69 billion in 2024 (a 12% jump), with these categories dominating:

• Home and Garden: $10.7 billion
• Variety Stores: $10.5 billion
• Food + Liquor: $8.8 billion
• Fashion: $6.4 billion

Wholesale Trade isn’t far behind at 70% adoption, followed by Manufacturing at 65%.

The Digital Stragglers

At the bottom of the digital food chain, we’ve got:

• Agriculture, Forestry and Fishing: 31% adoption
• Mining: 34% adoption
• Financial and Insurance Services: 35% adoption

For agriculture, the internet is mainly used for emails (82%) and research (65%), not actual sales. The sector’s digital adoption increases with business size, meaning smaller farms are being left further behind.

The Hospitality Paradox

Accommodation and Food Services hit 56% adoption, but here’s where it gets interesting…

Only 5% of food and beverage businesses could move entirely online during the pandemic. Yet online food delivery is now worth nearly $700 million per month, with over 2.7 million households spending $8.6 billion on food and beverages online in 2022-23.

The sector’s also reporting the highest skill shortages (56%), which explains why digital transformation is proving so challenging.

The Manufacturing Challenge

Australian manufacturing tells a particularly brutal story about digital adoption.

Despite 75% of manufacturers viewing eCommerce as an opportunity, only 10% could receive orders directly online as of recent studies. The problems run deeper than just having a website:

• Less than 20% have automated links between web front-ends and backend systems
• Integration between inventory and online sales remains problematic
• Many fear losing direct B2B customer relationships
• Concerns about having to offer lower prices online

Yet over 50% are now placing orders with suppliers online, showing they understand the value… they’re just struggling to offer it to their own customers.

The ROI Reality Check

When Digital Investment Actually Pays Off

The businesses getting digital transformation right aren’t just surviving… they’re absolutely dominating.

The Performance Gap:

• Digitally engaged businesses are 50% more likely to grow revenue
• They’re 8x more likely to create jobs
• 7x more likely to export
• 14x more likely to innovate new products or services

Small businesses moving from basic to advanced digital engagement saw:

• 60% increase in revenue per employee
• 28% higher revenue growth over 12 months
• 26% revenue increase for digital leaders vs 8% for digital beginners

The Australian Bureau of Statistics confirms that businesses with higher digital maturity consistently outperform their traditional counterparts across every meaningful metric.

The Skills Crisis That’s Killing Digital Dreams

Here’s the uncomfortable truth… 50% of Australian small businesses lack fundamental digital skills.

Even worse? Only 30% are doing anything about it by attending relevant training programs.

The Digital Solutions program from the Australian Small Business Advisory Services has helped over 5,700 businesses in just nine months, providing:

• 10,000 instances of social media and digital marketing advice
• 6,700 consultations on websites and selling online
• 6,000 sessions on business software
• 2,300 discussions on cybersecurity

But it’s still not enough to close the massive skills gap.

The Cybersecurity Nightmare

Cyber security incidents jumped from 8% of businesses in 2019-20 to 22% in 2021-22. That’s nearly a three-fold increase in just two years.

For many small business owners, the fear of being hacked is enough to avoid digital transformation altogether. It’s a classic catch-22… they need to go digital to compete, but they’re terrified of the security risks.

Government Programs… Helping or Hindering?

The Support That’s Actually Working

The Small Business Digital Champions Project supported 99 small businesses through comprehensive digital transformation. The results speak for themselves:

• Increased confidence and proficiency with digital technology
• Enhanced productivity and profits
• Improved business resilience during COVID-19

The Western Australian Government has allocated $6.6 million over three years for digital transformation grants up to $25,000 on a matched basis.

The Red Tape Reality

Despite these programs, CPA Australia research shows Australian small businesses are still “held back by insufficient government support for digital adoption and excessive red tape.”

Small businesses spend around five hours per week on government compliance, with costs proportionally higher than larger businesses. This administrative burden diverts critical resources away from digital investment.

The Mobile Commerce Revolution

Australia’s gone completely mobile-mad when it comes to online shopping.

68% of online purchases now happen on smartphones and tablets. If your business doesn’t have a mobile-first approach, you’re missing out on over two-thirds of potential customers.

The rise of social commerce is equally dramatic, with 53% of Australians engaging in social shopping activities. Platforms like Instagram and Facebook aren’t just for sharing photos anymore… they’re serious sales channels.

The Sustainability Factor

Here’s something that might surprise you… 75% of Australian consumers actively seek more sustainable shopping options, and 56% are willing to accept slower delivery if it’s more environmentally friendly.

Businesses showcasing genuine sustainability commitments are seeing improved customer loyalty. It’s not just good for the planet… it’s good for business.

What’s Holding Aussie Businesses Back?

The barriers to eCommerce adoption aren’t just technical… they’re deeply structural:

1. Poor Integration: Many businesses have websites that don’t talk to their inventory systems
2. Clunky User Experience: Bad UX leads to customer churn faster than you can say “abandoned cart”
3. Skills Shortage: Half of all small businesses lack basic digital literacy
4. Cybersecurity Fears: Rising cyber threats are scaring businesses away from digital channels
5. Supply Chain Complexities: Australia’s vast distances make one-day delivery challenging
6. Competitive Pressure: Large retailers and marketplaces squeeze smaller players on price

The Regional Business Paradox

Here’s something that’ll make your head spin…

Rural consumers are driving the biggest growth in online purchases, but regional small businesses are struggling with digital adoption due to:

• Limited awareness and knowledge
• Insufficient skills and time
• Technology phobia among business owners
• Bandwidth and infrastructure issues
• Perceived security and privacy concerns

While 82% of businesses in capital cities rate their internet as “sufficient” or “mostly sufficient,” regional areas face ongoing connectivity challenges.

Pro Tip: The Off-Season Digital Advantage

Want to slash your digital transformation costs without compromising quality?

Book your eCommerce project during December-February. Many Australian agencies offer 10-20% discounts during the summer lull to keep their teams busy.

It’s also when you’ll get their best talent focused entirely on your project, rather than competing with the end-of-year rush.

The Path Forward… What Success Looks Like

The businesses winning the digital game share common characteristics:

Customer Experience Focus: They prioritise mobile-first design and personalisation Data-Driven Decisions: They use analytics to understand customer behaviour Omnichannel Strategy: They integrate online and offline experiences seamlessly Social Commerce: They leverage social media platforms for direct sales Flexible Payments: They offer multiple payment options including Buy Now Pay Later Fast Delivery: They meet evolving customer expectations for speed and convenience

According to research from ThoughtLab, businesses implementing these strategies see revenue increases of 15-26% depending on their digital maturity level.

The Bottom Line

Australia’s small business digital divide isn’t just about technology… it’s about survival.

The 39% of SMEs generating meaningful online revenue aren’t just outperforming their competitors… they’re operating in a completely different league. They’re more resilient, more profitable, and better positioned for future growth.

Meanwhile, the 61% still struggling with digital adoption face an increasingly challenging future as consumer expectations continue evolving and competition intensifies.

The question isn’t whether to embrace eCommerce… it’s how quickly you can do it before your competitors leave you behind.

Your Next Steps

Ready to join the 39% of Australian SMEs actually making money online?

Here’s your action plan:

1. Get a Professional Website That Actually Converts: 68% of purchases happen on mobile devices, so you need responsive design that works flawlessly across all devices
2. Build Your Brand Authority: Strong logos and consistent branding help customers trust you enough to buy online
3. Streamline Operations with Web Applications: Integrate your online store with backend systems to avoid the integration nightmares plaguing 80% of manufacturers
4. Boost Your Search Rankings: Strategic link building improves your authority and helps customers find you before competitors
5. Launch Targeted Advertising Campaigns: Reach the right customers at the right time with data-driven paid ads
6. Dominate Social Commerce: With 53% of Australians shopping socially, you need a strategic social media presence that drives sales

The digital transformation train has left the station. The question is… are you on it?

Ready to Transform Your Business?

At RockingWeb, we’ve helped hundreds of Australian businesses bridge the digital divide. Our comprehensive digital services are specifically designed to get you into that successful 39% of SMEs making real money online.

Whether you need a conversion-focused website, strategic digital marketing, or custom web applications to streamline your operations, we’ve got the expertise to transform your business.

Don’t let another month pass watching competitors steal your customers online.

Book your free digital strategy consultation today and discover how we can help you join Australia’s digital success stories.

Sources: Data compiled from Australian Bureau of Statistics, CPA Australia, Digital Solutions Program, Small Business Digital Champions Project, and comprehensive industry research. All pricing and statistics verified as of May 2025.