Wed, Dec 06, 2017 - Page 10 News List

Amazon debuts in Australia, seeking to seize share of e-commerce market

Bloomberg

Amazon.com Inc is up and running in Australia, offering millions of products and one-day delivery in some areas as the Web retailer seeks to seize a share of the nation’s growing online retail market.

The company is to offer products across more than 20 categories, including consumer electronics, clothing and sports equipment, and offer free delivery on some orders, the Seattle-based firm said in a statement yesterday.

Operating in Australia would not be easy. Although the country is almost as large as the US, it is home to just 24 million people. Major population centers can be 4,000km apart, driving up the cost of deliveries.

Still, with nine out of 10 Australian households already online, Internet shopping would be worth A$31.4 billion (US$23.8 billion) by 2022, up from about A$20 billion now, according to researcher IBISWorld.

“The entry of Amazon will change the way Australian retailers currently operate,” IBISWorld senior analyst Kim Do said.

Amazon has been stepping up its efforts to expand in Asia.

In Singapore, where it debuted earlier this year, Amazon offers its Prime Now rapid delivery service with a more limited selection of merchandise.

India remains a bigger priority, with chief executive officer Jeff Bezos committing US$5 billion to expand in the country, offering a wider selection of products and services.

Australia presents a new challenge for the company, with a few local Web retailers already up and running. It is seeking to bring many of them into the fold by rolling out its online marketplace, open to third-party sellers.

“I think Australians are increasingly sophisticated consumers,” said Angus Smith, a 30-something Melbourne resident who checked Amazon for a new TV he has been looking to buy, but said he was not impressed by the selection. “It had all the stuff that you can already get and shipping prices were not very different from others. It was unexciting.”

Amazon has been selling e-books in Australia since 2013, but its broader retail offering marks the company’s 13th foray into a major market.

With a warehouse outside of Melbourne and corporate offices in Sydney, Melbourne, Perth, Brisbane and Canberra, the company over time will “create thousands of new jobs and invest hundreds of millions of dollars in Australia,” country manager Rocco Braeuniger said in the statement.

It expects to introduce Amazon Prime in Australia in the middle of next year.

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