Online sales will soon take a larger share of retail growth in Australia according to research from investment firm Morgan Stanley.
In a new paper, Australia Retail Internet Retailing Boom 2.0, the company predicts online sales to spike by more than 20 per cent a year, while bricks and mortar sales will slow to almost four per cent over the next four years.
It says goods such as books and cosmetics are between 19 to 64 per cent cheaper online with high labour and rent costs the main reason for the price difference.
“Given that both costs are very high by global standards we think that this means the Australian market is very well suited to internet retailing, despite its geographic isolation,” researchers say.
Of the $50 billion increase in sales over the next four years, Morgan Stanley predicts the internet to account for $13 billion. Non food retail is expected to grow by $18 billion dollars in total with online retailers taking more than $10 billion.
The investment firm believes electronics and department store retailers such as JB Hi-Fi, Harvey Norman, Myer and David Jones to be most impacted by the internet retailing boom.