Latest ecommerce insights and Trade Me trends Q1 2023
2022 and beginning of 2023 has been tough for ecommerce across the board.
Macro-economic factors such as inflation, the Ukraine war, slow down in the house market and a shift of expenditure back to travel, are all influencing NZ online retail spend, resulting in year on year decline. Throughout 2022 and beginning of this year we can see online shoppers progressively tighten their belts, resulting in significant spending declines.
NZ Post’s half-year results indicate that parcel volumes have dropped significantly in the six months to December 2022 and that this is the third consecutive quarter when online spending has fallen compared to the same quarter in 2021. The rate of decline has increased each quarter (-2% for Q2, -12% for Q3 and -22% for Q4). While the declines of Q3 and Q4 can be partially explained by reduced in store restrictions and the reopening of travel, hospitality and entertainment, the increasing decline is certainly an indication of the progressive impact the economy is having on shopper behaviour.
Source: NZ Post latest eCommerce insights
Here at Trade Me we’re seeing similar trends. Our Datamine data shows us that for calendar year 2022, the NZ online retail spend also contracted, feeling the impacts of the wider economy.
However, it's important to note that it isn't just Trade Me in decline. If we ignore the fluctuating results that covid brought in 2020 and 2021, we're still seeing growth vs 2019, with large uplifts in Car Parts, Business & Farming and Building & Renovation due to increasing average sales prices but this is being offset by lower spend in discretionary categories like Mobile Phones and Electronics. In the last 6 months spa pools, sofa beds, outdoor furniture and lounge suites have featured in in our top ten searches, while more recently we've seen a further uplift in Building & Reno and Business Farming due to increased activity and buyer demand for flood related products.
Trade Me Marketplace continues to be the market leader in both web and mobile phone app (January 2023)
Source: Data is taken from SimilarWeb
We still hold twice as many visits of our nearest competitor, Amazon and gained share from The Warehouse, The Market and Mighty Ape this year. In mobile phone apps, we hold 2X the sessions to our nearest competitor, with Ali express in second place. We've continued to keep these positions over the last 12 months.
NZ Post report that even with the tougher economic conditions, Kiwis continued to support local online retailers with 70% of their online spending with NZ-based retailers during Q4 2022, and online spending remains well above pre-pandemic levels throughout the country.
So, there is a definite shift in the market with these macroeconomic conditions, however Trade Me stays strong with a large market share and active members. Unfortunately it is a tougher economic environment for now and consumer pessimism remains high with most shoppers only planning to spend more on essential items (like groceries) or overseas with international travel.