How Amazon Australia will Impact Australia’s e-commerce Industry

After announcing its incoming arrival to Australia, Amazon has earned a reputation for being ‘the worst possible corporate citizen’. It is now being called by names like ‘Attila the Hun’, ‘a parasite’, ‘who pays no tax’ or ‘sends everyone broke’.

Why is it so? Is it the so-called happy consumers or the retailers who are not happy with Amazon?
Well, of course with Amazon’s cavernous new fulfilment centre gearing up to house hundreds of thousands of products shipped in from all over the world, the major Australian retailers are worried about their trade decimating drastically.

Amazon all set to come to Australia

Cause of the tumult

The rise of online shopping has caused Australian retail to be fully exposed to global competition. With Kogan and eBay already contributing to the massive retail culture, Amazon is now ready to put tremendous downward pressure on prices mainly because it can afford to forgo the profit.

Amazon isn’t just the biggest retailer on earth, but it is bigger than most of Australia’s major local retailers combined.

Annual sales of Amazon

Several Australian retail chiefs have had quite public reactions to Amazon’s presence. In an interview with The Australian last month, Guy Russo of Wesfarmers told analysts and fund managers that “it feels like Armageddon is coming.”

A report by Morgan Stanley revealed that the discount stores Kmart and Target are among those most at risk and that they could lose around $400 million in earnings by the 2026 financial year as a result of the online retail giant’s low prices, fast buying and delivery options, and a wide array of products.

Amazon’s CEO Jeff Bezos was just recently crowned the richest person in the world with a net worth of more than $100 billion thanks to Black Friday. Thus, showing how dominant Amazon is in the e-commerce market.

Today, it has become literally effortless to buy from Amazon because of its Prime Membership, Alexa Assistant and Echo Device which provide full buyer protection. According to sellerlabs, the primary reason why Amazon customers become Prime members is its Free 2-Day Shipping! Such solid support facilities can lead to Amazon having the same impact on the retail industry as Google has had on other search engines.

Still, many other retail businesses claim to have an opposite notion of the issue.

Not Sailing In the Same Boat

Tom Godfrey, the head of media and communications at Choice told the Huffington Post that according to him, the retailers have the power to compete with Amazon and have enough time to brainstorm over new strategies for it.

Jerry Macey, national manager of Commonwealth Bank, Australia told the Huffington Post Australia that he believes some Australian retailers are excited about Amazon’s arrival because it could give them a new way to promote and sell their products.

“We don’t quite know what [Amazon are] going to land with yet. That is why we’re suggesting that an innovative culture is probably the way to combat something that you can’t see yet,” he said.

This is also true in the case of the Victoria-based furniture e-commerce business, Brosa. In an interview with Internet Retailing, Ivan Lim, co-founder of Brosa said, We’re excited because the idea of shopping for furniture online becomes a lot more intuitive when more Australians are doing more of their shopping digitally.”

In fact, many E-web marketers see their businesses growing because of the arrival of Amazon.

Chief executive Martin Nicholas of Greencross Limited, the largest pet-care retail group in Australia, also mentioned in a conversation with The Australian Financial Review that he is not threatened by the so-called Amazon effect.

“People have been asking us questions about our Amazon resilience and what impact Amazon is having on us. What I’m passionate about is letting people know how confident I am that Greencross will be a winner,” he said.

So what now?

Amazon’s arrival to Australia may have put several local retailers under pressure, but the critical point is: so long as these businesses remain competitive and keep acting in their customers’ best interests, there is nothing to fret about.

With that being said, it is still unclear what the real impact of Amazon’s Australian expansion will be, but the local retailers have plenty of time to square their shoulders and combat the U.S giant efficiently.

By formulating strategic approaches, it is possible for them to move head-to-head with the largest e-commerce player in the globe.

Now, we just got to wait and see what real impact Amazon is going to bring.

Here’s a helpful article on how to list your items on Amazon, to avoid failure. 


Editing by Naing Oo.

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How Amazon Australia will Impact Australia’s e-commerce Industry
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