Despite parts of Australia experiencing some of the world’s longest lockdowns, Australia’s small business recovery insights showed the sector experienced growth as more people turned their side hustles into a reality.
To shed light on the impact the global health crisis – and ongoing recovery – has had on small businesses, Mastercard today released Recovery Insights: Small Business Reset.
Recovery Insights: Small Business Reset identifies several key trends for Australia:
- Entrepreneurship:
- Almost three-quarters more small retailers launched in 2020 than in 2019. The number of new SMBs in Australia grew 73% in 2020 vs. 2019
- Australia is ranked in the top three countries for global SMB YoY growth, behind the UK (101%) and the United States (86%)
- E-Commerce:
- Following shutdowns, the number of businesses going online each month more than doubled from pre-pandemic levels, peaking in July 2020. In fact, 60% more merchants accepted e-commerce sales in 2020 for the first time vs. 2019)
- This reflects increased demand for an online sales channel, as well as the slight lag after lockdowns began to bring it into reality. The shift to digital has persisted at an elevated level since.
- Closures:
- Small businesses that closed early in the pandemic were about three times as likely as larger businesses to remain closed long term
- In Australia, 34% of small businesses that closed during the pandemic remained closed at six months, 3.1 times higher than large businesses (11% of large businesses remained closed after 6 months)
- Location:
- In April 2020, spending at SMBs and large businesses in Sydney’s central business district are roughly half of 2019 levels, down 54% and 57% respectively, and largely remained the same in August 2021, at 54% and 56%.
- Spending at SMBs outside of Sydney’s central business district is down only 16% vs 2019, while spending at large businesses outside in more residential neighbourhood areas performed much better only 6% down vs. 2019 levels.
- SMBs in Sydney’s residential parts of the metro area/city saw retail spending increase 19.9% August YTD vs. the same period in 2019, though retail sales were more significant for large businesses, seeing a 28.5% increase August YTD vs. the same period in 2019
The insights draw on the Mastercard Economics Institute’s new Small Business Performance Index* of aggregated and anonymised sales activity within the Mastercard network. You can check out the report and find out which suburbs in Melbourne and Sydney are considered Underperforming, Recovering, Stable, or Outperforming.