Amazon Plans to Bring its Online Shopping Platform to Australia

Amazon is planning to bring its online shopping platform to Australia next year. The announcement has sent shivers through the Australian marketplace.

From their peak share prices previous year, major retailers JB Hi-Fi, Harvey Norman as well as Myer are down 22%,25% and 47% respectively. The major shopping center landlords–Scentre Group as well as Vicinity Centres–are down 24% & 25%. Apart from these, Amazon is also showing the fear of how the e-commerce giant could change the behavior of shoppers.

John Winning, the founder of Appliances Online as well as the CEO of whitegoods retailer Winning Group, says that it has become too late to prepare for the arrival of Amazon in Australia.

Winning believes the hardest hit will be those who retail cosmetics,books as well as clothing.

“Amazon will win over most Australian retailers on experience and price every time,” he writes in an article on LinkedIn.

However, retailers who have invested in developing their point of difference can stand out from the crowd.

“It’s really sad, but if Amazon can’t win customers by going 5% cheaper, then they will go 10% cheaper and unfortunately, they will keep going until they kill the competition,” he says.

The first warehouse of Amazon Australia is already up & running in eastern Melbourne. However, it is not yet known when the company will start to sell from it.

Amazon has up till now gained a modest market share of 0.3% in Australia through overseas sales as well as its existing Kindle store & AWS (Amazon Web Services). However, the launch of designated warehouses, a vastly expanded range as well as the potential for local delivery networks are game-changers,says Broadfoot,  business management consultant and retail expert.

Analysts at broking house Morgan Stanley believes that Amazon will be taking a $12 billion bite out of the retail sector in Australia in the next decade.

This is going to put huge pressure on the businesses in Australia. Existing retailers start innovating and compete with cheaper, faster goods.