Why should you start a dropshipping business in Australia?

Australia continues to rank among the world's top 10 most active and profitable ecommerce markets. The Covid-19 outbreak was the driving force behind Australia's increased online shopping habits. Post-pandemic, it remains popular. Dropshipping is a beginner-friendly business idea in the land of kangaroos, motorbike cowboys, and the Great Barrier Reef.

Dropshipping is an online retail business model. A manufacturer sends items directly to customers on behalf of a seller that advertises the manufacturer's goods. The seller doesn't store, pack or ship the goods themselves. For example, by signing up with dropXL, you can advertise and sell vidaXL products online. When you make a sale, we send it to your customers directly from our warehouse.

Location

Australia, formally known as the Commonwealth of Australia, is a developed country and the sixth largest in the world. It sits in Oceania, in between the Indian and Pacific oceans. The capital city is Canberra, located in the south east.

Population

Australia's population continues to grow steadily, with internet users reaching 26.1 million in January 2025. The Australian Bureau of Statistics projects continued population growth, with the majority concentrated in coastal urban centers. Nearly 90% of Australians live within 50 kilometers of the coastline, creating distinct market clusters that are ideal for targeted ecommerce strategies.

Wealth

Australians have an average household income of AUD 2,349 per week as per the Australian Institute of Health and Welfare (AIHW) in December 2020. The Organisation for Economic Cooperation and Development (OECD) reports that Australia has an above average employment rate of 73%, household disposable income of USD 37,433 per annum, and household wealth of USD 528,768.

The ecommerce market

In 2024, 17.08 million Australian shoppers used online shopping websites monthly, representing 63.94% of the country's population (Paymentscmi).

Revenue in the eCommerce market is projected to reach US$42.22 billion in 2025, with expected annual growth rate of 8.28% (Mordor Intelligence).

The Australia e-commerce market is projected to register a CAGR of 13.7% during the forecast period (2025-2030) (Statista).

Market projections show continued acceleration, with some estimates suggesting even higher growth rates through the decade

Online shopping has a 17.1% share of the Australian retail market and will increase by an average of 6.6% to 22.1% by 2027 (eCommerceDB, 2022).

By 2033, around 1 in 3 dollars will be spent online (Australia Post, 2023).

These statistics represent a fundamental shift toward digital commerce among Australian consumers. The sustained growth trajectory and high engagement rates present compelling opportunities for online retail ventures.

Product categories with high sales

Australians online annual spend for each category of consumer goods as per Data Reportal, 2023:

Fashion (USD 9.8 billion)

Toys, hobby, DIY (USD 8.52 billion)

Electronics (USD 6.23 billion)

Personal and household care (USD 4.41 billion)

Food (USD 3.81 billion)

Furniture (USD 3.3 billion)

Beverages (USD 2.76 billion)

Physical media (USD 740.7 million)

Exceptional digital adoption

Australia boasts world-class digital infrastructure supporting ecommerce growth:

Internet penetration stands at approximately 88-91% of the total population, well above global averages 94.1% of internet users access the web via mobile phones, highlighting the critical importance of mobile-optimized shopping experiences

Smartphone penetration continues expanding, with users increasingly comfortable making purchases through mobile devices

Australia's internet population shows strong upward trends and is expected to exceed 23.3 million by 2025

The high internet penetration rate creates an extensive potential customer base, while mobile-first behavior patterns emphasize the need for responsive, mobile-optimized dropshipping stores.

Logistics

Australia is well placed as China's neighbour. Most retail manufacturers are based in East Asia, which is an advantage when shipping to Australian customers. The logistics network in Australia is highly developed and efficient. Australia Post is one of the leading logistics providers. According to the 2023 Australia Post eCommerce Industry Report, Australia Post invested AUD 427 million in new parcel facilities, fleet and technology. They also opened eight new facilities nationally in 2022. This brings Australia Post's total investment over the last three years to more than AUD 1 billion.

Other major players in Australia's logistics industry:

Linfox

Brambles

Aurizon

AirRoad

Summary

As Australia becomes increasingly digital each year, ecommerce is a ripe opportunity for a customer base ready to buy. Taking into account the high internet penetration rate, high numbers of digitally-savvy shoppers, and smart-tech owners, there aren't many disadvantages to starting a dropshipping business down under.