Amazon has officially launched its online marketplace in Australia, promising next day deliveries in some areas and access to millions of products from the thousands of sellers that have partnered with it.
Rivalling retailers have been bracing for the e-commerce giant's local
entrance for some time, with companies, such as JB Hi-Fi, Myer, Woolworths,
Harvey Norman, Kogan, Australia Post and more, bolstering their online
delivery systems and renovating their retail stores in anticipation.
The launch comes after Amazon briefly trialled its local marketplace to a
limited number of customers over this year's Black Friday sales. The
official marketplace now offers "millions" of products across 20
categories, including consumer electronics, sporting and outdoor goods,
tools, toys, beauty products, clothing and Amazon devices, to name just a
"By concentrating on providing a great shopping experience and by
constantly innovating on behalf of customers, we hope to earn the trust and
the custom of Australian shoppers in the years to come," says Rocco
Braeuniger, country manager of Amazon Australia.
How does it compare on price?
A quick comparison of products sold from Amazon and local retailers found a
healthy bout of competition.
Amazon managed to undercut rivals on a Lego BB-8 play set by $20 to $40. It
offered the popular children's toy for $100, compared to Target's $120 and
Toys R Us' $140.
The retailer was similarly competitive when it came to ordinary household
goods, such as Dettol liquid hand wash. Amazon is offering it for $2.54,
compared to Chemist Warehouse's $2.99. Woolworths, which typically offers
it for $2.90, is selling it with a discount that undercuts Amazon's price
But it appears consumer electronics sold by Amazon aren't as good value. A
Samsung Galaxy S8 (64GB, G950F) is sold by Amazon for $1130.44, a little
less than Samsung's online store price of $1199. Online retailer Kogan, however, bests them both with a sales (and delivery) price of $888.
Presently Australians can access Amazon's online Marketplace, but the
company plans on launching its Prime shipping service at an undisclosed
date in mid-2018. It will offer shipping, shopping and content services
bundled together in one monthly fee.
Disrupting the retail market
Amazon, which generated $174 billion in revenue for the last financial
year, has a reputation for undercutting traditional retailers on price,
choosing instead to make money by selling products in high numbers. This
has led to some local retailers calling for the competition watchdog to
Rod Sims, chair of the Australian Competition and Consumer Commission
(ACCC), spoke on Amazon's entry at the RBB Economics Forum in Sydney last
"Amazon's entry into Australia will be good for consumers, despite it not
being good for some incumbent retailers. Some of these incumbents have even
called for ACCC intervention to act against Amazon's business model," says
"Firms that offer consumers a better deal should be rewarded irrespective
of their size. To some this may seem unfair, but it is this process that
drives innovation, better business practices and lower prices for all
Video: Inside an Amazon fulfilment centre based in the US
Media pundits and analysts can only speculate on the impact Amazon will
have on the Australian market. The company has developed a network of more
than 70 warehouses in its home country of the United States, allowing it to
fulfill deliveries for its Prime Now customers within two hours.
But it faces a significant challenge in completing deliveries quickly and
on a budget across Australia, a country where the population is relatively
small and disparately spread. The company's starting point is a 24,000
square metre warehouse – coined a 'fulfillment centre' by Amazon – in
Melbourne's Dandenong South. It also employs more than 1,000 staff at its
corporate offices in Sydney, Melbourne, Perth, Brisbane and Canberra.