Amazon's Australian Launch: Everything We Know So Far

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Amazon is finally launching a shopping service in Australia - which means you will soon be able to buy everything from food to electronics without paying those exorbitant international shipping fees. Here's everything we know about Amazon's arrival Down Under so far.

Amazon's decision to finally bring its online shopping platform to Australia is huge news. The US-based mega corporation has dominated every market it has chosen to enter. If they can deliver on the holy trinity of product choice, speed and price, there's no reason to think Australia will be any different. Here's a primer of the available information we have so far, along with some expert analysis for the things we don't.

When is Amazon coming to Australia?

Amazon Australia's launch date remains shrouded in mystery. However, all signs point towards sometime in 2018.

Where will Amazon operate from?

As reported last week, Amazon will kick off its local presence with a 24,000 square metre centre in Melbourne. The flagship facility will be located in the Pellicano’s M2 Industry Park, providing easy access to the South Gippsland Highway, Monash Highway and Eastlink.

How many products will Amazon sell?

Amazon's official launch statement has promised "hundreds of thousands of products". However, it's not entirely clear whether this number relates to individual product types or total available stock across all categories. The latter seems more likely, but we're pretty sure the selection will be pretty big regardless.

What types of products will Amazon sell?

Amazon is keeping tight-lipped on precisely what it will actually be selling in Australia. Morgan Stanley retail analyst Thomas Kierath reckons it will start with books, electronics and clothing.

Food delivery also appears to be a priority, with Amazon's former global logistics senior manager, Brittain Ladd claiming that a separate "Amazon Fresh" site will be part of the launch. However, a recent survey of food suppliers by investment bank UBS revealed that Amazon has only been talking to packaged food and non-food grocery suppliers, which suggests fresh food won't be part of the initial roll out.

With that said, the inclusion of non-fresh food at the launch does seem likely. Amazon has been talking to around a quarter of Australia's grocery suppliers in this segment. This notion is also backed by the hiring of country manager Rocco Braeuniger, who is currently director of consumables for Amazon Germany. (Rocco’s previous role included Pet Supplies; Health and Personal Care; Baby, Beauty, Grocery and Amazon Pantry.)

How fast will products be delivered by Amazon?

Speed is expected to be a big deciding factor in Amazon's level of success. If it can beat local retailers on delivery time and price, the battle is basically over.

According to Ladd, Amazon will be launching an Australian version of its premium Prime Now service, which provides faster shipping to members alongside other perks. Amazon has also promised “fast delivery” as one of its core strategies.

There's still no word on whether Amazon will be bringing in its own courier service or relying on third parties for delivery. Either way, its entry Down Under is sure to put existing supply chains and logistics providers under new pressure.

Is Amazon going to kill local jobs?

There can be little doubt that Amazon's presence in Australia will affect local retail: that's what disruptors do. However, it will also be injecting a swag of new, locally sourced jobs into the economy.

The company has already begun a recruiting drive across a range of verticals, including operations managers, pickers, packers, systems technicians and HR specialists. With that said, it's clear that local retailers will need to adapt if they hope to compete.


We're curious to hear what your thoughts are on Amazon's imminent launch down under. What are you most excited about? Tell us in the poll below!

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Comments

    I'd bet JB Hi-Fi/Home and Harvey Norman will go the way of Dick Smith within 6 months. They can't compete even if they took their head out of the sand and realise Amazon's coming. If they've got even an ounce of common sense they'll be preparing to work with Amazon by selling them distribution capability, allowing Amazon to put collection lockers in their stores etc.
    But no, their lack of foresight and stubbornness will see them go under.

      JB HI FI no they will not Harvey Norman easily will JB HI FI is Best Buy in the us and they have not been too badly affected and JB easily has the best prices on everything tech

    The following is what the markets are saying about Best Buy in the US:
    'Best Buy has already weathered the worst of the 'Amazon storm' through price matching and substantial in-store/online improvements, and has now been steadily gaining market share ... Best Buy has fought back against Amazon better than most.'

    I would say that either JB Hi-Fi and/or Harvey Norman have strategies in place to do similar. I'm not sure there is room in the market for two large companies in Australia though. My only hope is that we as the consumer get better service, less pushy staff and better pricing from them. Otherwise, I would love to see Amazon take them down (especially the arrogance of Harvey Norman's (Gerry Harvey especially)). One thing is for sure - it's not a great time to be getting into retail!

      Gerry Harvey won't, in any way, try to match Amazon, because he's a stubborn prick who will die by his own hubris.

      JB HiFi might find ways to adapt, but Harvey Norman will be killed off by Amazon - and good fucking riddance!

        Harvey Norman already markets almost exclusively to the kind of people who aren't interested in online shopping. They'll go out of business as their customer base ages and shrinks, but Amazon won't hasten that too much.

        JB could dodge the bullet easily - if not cheaply - by putting posters up in all their windows saying WE PRICE MATCH AMAZON.COM.AU.

    As a disruptor, how would Amazon's arrival in Australia affect hiring practices of local SMEs?

      Will Australians accept working in an amazon warehouse environment?

      Take a lot of market share, drive down revenue of incumbent retailers, forcing them to lay off staff.

    I deal with Amazon in the USA and Europe (as a supplier) and all I can say is "Be careful what you wish for". Don't let your frustration and overriding anger with JB/Harvey/other BigBox retailer blur your vision. Service will suffer. Low prices come at a cost and the cost will be choice. We already pulled 80% of our catalog off Amazon because of the games they play. Like Milo Minderbinder in Catch 22 the pretend claim to be only customer focused just isn't true. In the never ending rush for efficiencies things like paying the bill gets overlooked. We have been chasing money for so long that they eventually suggest we just write it off. Really? How does that help customers?

    If the retail world only ever consisted of identical items in a SKU (if everyone wears blue T shirts) then it is an efficiency game. But if there is variation and nuance in your lineup, then you get squeezed into the "blue T shirt" mould so that Amazon can be more efficient thus delivering lower prices because that's all customers want. Well, that's what many customers SAY they want but they also want more variety than they admit to and the more varied a line up the less efficient you will be by their standards. That's when the problems start.

    Like a 21st Century Snake Oil salesperson, they promise magic but the costs, although hidden, are very real. As for their strategy here, it starts with "Join Our Marketplace" so the suppliers will do a lot of the delivering as Amazon builds up the database then one day those suppliers will find that their magic benefactor is sourcing similar products from China and supplying directly instead. Again, if they are the same blue T shirts, lucky for the customers, but if the copies are not of the same quality, does the consumer win?

    Be very careful about this lot.

    i think they are using uber for local deliveries

    Amazon is similar to Ebay. I buy a very large amount of items which are not available in Australia from Amazon and Ebay. Having a Amazon fulfilment centre in Australia will be great. Imagine the extra perks available to customers when it is finally open. Very exciting.

    Here's my view as an Amazon US captive customer who use to live in Aus.

    Other suppliers can certainly do fine alongside Amazon, as they do in the US. At a minimum they need to have:

    1) Competitive prices for popular SKU's; not cheaper, but just the same as Amazon (including shipping costs). This means directly sourcing your stock. If you are still buying from a middleman/wholesaler, then this discussion doesn't apply to you, you're already screwed :-)

    2) Solid customer service including returns (near zero tolerance for unhappy customers). Customers have to be 100% confident you won't screw them over, and have no un-fixed bad experiences to tell others about.

    Lastly they need to target Amazon's biggest weakness, it's inability to maintain consist stock in almost any product range.

    If you go to JB or especially Woolworths or Bunnings in Australia there are ranges of products you can just count on them having in stock. Amazon tries to stock so many SKU's then never achieve those levels of reliable supply.

    For many items Amazon will fill gaps through other marketplace sellers, such that when they can't supply they'll offer you the product supplied (and maybe shipped) from another marketplace sellers. But then the unreliable pricing/supply still annoys customers I think.

    Currently groceries are the worst. I can tell you as an Amazon Fresh shopper than on any given day 30-40% of the preferred SKU's I regularly purchase will be unavailable and I'll have to substitute. The can't even keep the two sizes of the milk brand I buy in stock from week to week, I have to buy the large or the small size, because the size I bought last week is 'out of stock'. Milk!

    No doubt they'll tirelessly work to improve, e.g. they just bought a supermarket chain here that they are integrating to shore up the difficulties they are having with groceries. But right now they rely on stellar customer service to compensate for a lot of stock and supply weaknesses.

    So I see JB, Kogan, Bunnings, Woolworths, having every opportunity to compete. JB and Kogen need to move to daily pricing. Judging by Gamestop here, amazingly even customer-predatory businesses like EB Games can survive alongside Amazon. But I think Harvey Normann and especially Myers are in a very weak position (with spillover decline for Westfields and their smaller tenants). Costco and IKEA probably have to build out customer service significantly, or resign themselves to selling through Amazon. K-mart better keep a tight grip on the low-income market.

    The way of the future .... floor space retail is a thing of the past.

    Harvey Norman and the other businesses that sell electrical appliances stopped selling mobile dishwashers a few years ago and im really hoping that Amazon will sell them Amazon America does.

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