COVID-19 e-commerce surge was a $2b+ boom, Deloitte says

With lockdown restrictions and many retailers closed, consumers had little choice but to shop online.

And a new study from Deloitte shows just how big the COVID-19-inspired boom has been for e-commerce.

E-commerce activity during the three months to May 2020 came in $2.4bn higher than the same time last year.

The report also found:

26 million more parcels were delivered by AustraliaPost;
Activity in regional Australia grew faster than in metropolitan areas;
Food, liquor, homewares and appliances stood out as the top categories for growth in Australia Post parcel deliveries in the COVID lockdown. Variety stores and fashion retailers gained too;
This delivery activity generated an additional $747m in flow-on economic activity in other sectors and supported 25,000 jobs.

E-commerce kept the posties busy

The boom was measured by Australia Post deliveries and while this was not all of the e-commerce activity, it was a high proportion at 80 per cent.

“Consumer behaviour has changed as a result of this health and economic crisis,” Deloitte Access Economics Partner John O’Mahony said.

“Businesses and individuals have had to adapt drastically to a changing climate.

“With many stores closed or having limited physical operations, consumers have shifted to online purchases, resulting in changes to delivery networks.”

Australia Post CEO Christine Holgate said the national post service had become the “BusinessKeeper” of the Australian economy.

“It’s very clear Australia Post has played a critical role in keeping the country running during the COVID-19 pandemic,” she said.

“Not only have we supported business to trade online, for every three workers employed by Australia Post, another two jobs in other businesses and industries have been supported, many in small and medium businesses.”

Homewares, appliances stocks in front

Several ASX small caps benefited as a result of this e-commerce boom.

This was the case for homewares and appliances stocks, two categories Australia Post pointed to as beneficiaries of the COVID-led e-commerce boom.

Furniture stores Adairs (ASX:ADH), Temple & Webster (ASX:TPW) and Nick Scali (ASX:NCK), surged as consumers decided to use their time locked down to focus on home projects.

Other niche product sellers like personal grooming appliance retailer Shaver Shop (ASX:SSG) also went for a run on stronger online buying activity.

Baby store Baby Bunting (ASX:BBN) has gained too because the pandemic hasn’t stopped people having or needing to care for their babies.

The ASX’s largest homewares stock, Breville (ASX:BRG), was also no exception, sitting over 30 per cent higher in 2020.

While it has not provided shareholders with updated trading numbers since its mid-May capital raising, the company confirmed it witnessed strong sales growth.

Food & booze

With food falling into the ‘essential services’ category many ASX stocks in this space were able to keep operating.

However, with diners not being able to eat out many restaurants and pubs felt the brunt of COVID-19. Export markets also took a bit of a beating, with stocks like Huon Aquaculture (ASX:HUO) and Clean Seas Seafood (ASX:CSS) being impacted.

One of the ASX’s few liquor stocks, Digital Wine Ventures (ASX:DW8), was a fair bit luckier, already selling online before the pandemic hit and sales continuing to rise.

The company has seen even more of a boom in recent months booking record orders in April and May.

While the company has not provided an update for June yet, it is a telling sign that several more iconic wine brands, including Henschke and Mollydooker, joined the platform.