Almost half of the population in New Zealand are now using the internet to buy purchases.
A new report produced by PricewaterhouseCoopers and Frost & Sullivan, says online shopping now accounts for 5.1% of all retail sales.
Online shopping was expected to increase by 12% for 2010 and spending via the internet this year is expected to total $2.7 billion.
PWC retail partner Julian Prior says each internet shopper is expected to spend almost $1400 online this year.
He says businesses should look at selling online, as well as in their stores, to keep up with customer demand.
The Retailers Association also says businesses need expand into the online shopping market, to ensure they survive.