Spending on overseas online sites dips in December 2019

Happy Asian woman doing online shopping at home. Online payment and shopping concept.

Online spending on overseas sites dipped in December 2019 compared to the previous corresponding period partly due to the GST change.

Spending on overseas sites fell 9 per cent on last December, the drop coinciding with the widening of GST on offshore online purchases from December 1.

According to Gary Baker, director of institutional research at Bank of New Zealand, part of the 9 per cent year-on-year falls reflects changes in purchasing behaviour in response to the GST change, but at this stage, they won’t ascribe the whole fall to the GST.

“Retail sales can be volatile from month to month and factors such as exchange rate movements also influence spending patterns.”

Baker added that in November purchases from offshore sites were already running at a level 4 per cent lower than the prior year. 

Total online spending in December, excluding GST, was 5 per cent higher than a year ago helped by the 13 per cent rise in spending on local online stores.

The food and electrical categories showed strong performance during the period.

Spending on entertainment media at offshore sites bucked the trend and continued its strong run in December, up 14 per cent year on year. This category includes digital goods, which had already been attracting GST since October 2016.

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