Amazon launches in Australia, retailers urged to prepare for battle

Posted December 05, 2017

"Focusing on customers and the long-term are key principles in Amazon's approach to retailing", said Amazon Australia country manager Rocco Braeuniger in a statement.

The giant e-tailer is promising one-day deliveries in most capital cities and 30% discounts on big-brand toys and clothing.

While Amazon's launch is likely to shake up the retail environment, the fact that it has just one distribution centre for the entire country means, at first, the service will not be almost as comprehensive as the USA or United Kingdom version.

Customer orders will be fulfilled from Amazon's new centre in Dandenong South.

For electronics, we saw a portable hard drive from WD on sale for $89 on Amazon, which again meets the $49 free delivery threshold.

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The site will also give users access to Prime Video, Amazon's answer to Netflix.

"We believe Amazon's full entry into Australia will likely be a success", UBS analysts said in a note ahead of the launch, adding that Australia was an "attractive market where online is under-penetrated".

Amazon said it expects to launch Prime shipping benefits in Australia in mid-2018.

The move establishes the $550 billion behemoth as an aggressive presence in the sluggish Australian retail sector, just as shopkeepers were hoping for a rush of sales over the important Christmas holiday season.

But there's some good news on the horizon, according to Marin Currie Australia consumer sector research analyst, Jim Power, who said the Australian retail sector, by and large, can cope with the arrival of Amazon.

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"For Amazon's Marketplace to be successful in Australia, Amazon will need a good product range, including local specialty suppliers".

There is, however, no news on whether or not Amazon Fresh will be delivering Aussies their groceries any time soon.

"Amazon had paid no taxes on retail in 23 years, they have never made a profit in retail in 23 years and they never will".

"Over time, we will create thousands of new jobs and invest hundreds of millions of dollars in Australia", said Braeuniger. Small businesses selling on Amazon Marketplace globally have employed more than 600,000 people to support their Amazon activity.

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