Early in April 2017, Amazon made an announcement that several retail analysts had perhaps been expecting- that it is all set to enter Australia. What no one could have perhaps guessed is that Amazon’s entry into Australia is not going to be a ‘soft launch’ per se. The retail giant has been offering Kindle products and ebooks in Australia since 2012-2013.
Now, with offerings such as Amazon Prime, fulfillment centers across the country, same-day delivery and Amazon Fresh, every single retailer in Australia is going to be affected. Large retailers are already scampering to find ways of sustaining their revenues – a Bloomberg report concludes that the news of Amazon’s entry is partly responsible for Wesfarmer’s scrapping a $1 billion IPO for its stationery and office supplies wing.
The smaller retailers are, however, on the perch of an extraordinary opportunity, now that Amazon Australia is accepting seller registrations. While several third party retailers feel that Amazon’s fees and commissions are steeper than prevalent rates, by choosing the right product assortment and selling through FBA, there is nothing to stop you from making profits and establishing a thriving marketplace channel.
After all, there is a reason why Amazon commands higher fees- A NIELSEN survey has shown that months before the actual launch, 56% of all surveyed adults are already looking to shop on Amazon. Their categories of choice? Consumer electronics, books, and clothes.
Curiously in the same survey, less than 10% of people expressed interest in buying meat and fresh produce through Amazon’s much awaited Fresh offering. Amazon Fresh is only available in the US and the UK for now. We’ll just have to wait and see if Amazon plays its fabled number game in these categories too, and turns around people preference through its USP- fast delivery and discounted rates.
AmazonBasics, the behemoth’s in-house offering of gadget accessories, food grinders, and home accessories, is going to one of the major offerings in Australia, and Amazon is already in the process of registering trademarks for them.
News sources say that Amazon is actively looking for a warehouse to set up its first fulfillment center in Sydney, Brisbane or Melbourne. And it is going to be huge, at 93,000 square meters!
The Australian retail environment is experiencing a period of volatility, and in March 2017, has seen a significant downfall. Consumer interest in buying has been impacted by growing housing debt and salaries that just aren’t rising as fast as the inflation. In this scenario, we’ll have to watch if Amazon is able to crack the retail code and gets people shopping again.