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Amazon-owned online bookstore grows Down Under

While Amazon is busy stealing the headlines, its wholly-owned book subsidiary, The Book Depository, has quietly expanded its Aussie operations over the last 12 months.

After first adding 25,000 titles by Australian authors to its catalogue and using a third-party logistics company in Melbourne to pack and ship products locally last year, the company has since grown the figure to 36,000 Aussie titles, also managing to grow sales of these titles by five times over the period.

In Australia recently, to meet and greet with some of the UK-based firm’s business partners, Book Depository’s managing director Chris McKee told Inside Retail that the books retailer is seeing a large proportion of these Aussie titles selling outside Australia.

“We’ve been selling them to over 100 countries and for some of them, as many as a third of the sales can be going overseas or outside,” he said.

Pointing to a few notable successes, McKee said The Barefoot Investor, written by Aussie independent investment advisor Scott Pape, went to number one on Book Depository’s worldwide charts and stayed there for 11 weeks, selling in 61 different countries.

McKee said the book e-tailer was fortunate to be the first in line to sell the book, before it was published elsewhere.

The online book retailer also works with local publishers including Wiley Australia, Penguin Random House and the likes of McGraw-Hill off the back off a “very successful academic season.”

Commenting on the distribution side of things, and logistical difficulties of navigating a vast geographical terrain like Australia, McKee said it partners with the Australia Post as they “provide great reliability on final mile delivery” and it was transparent about the regional delivery times on its website.

“When shipping from the UK, we actually direct inject into four regional hubs so we get quite efficient delivery times even for the books shipped from the UK, and in fact, some of those Northern Territory and Western Australia locations, we can probably get them there as quickly from the UK as we do from within Australia.”

Looking ahead, McKee said the Australian focus will be on increasing the selection of books available for sale and investments in its mobile platforms.

“We are seeing a strong shift towards mobile for shopping so are investing in the mobile shopping experience to ensure that is as good as it is on other formats,” he said.

“It’s also about focusing on constant improvement in the selection we have available and the customer experience on the website.”

McKee also ruled out any plans for a bricks and mortar foray.

In 2011, Amazon acquired British online book retailer The Book Depository. Prior to the acquisition, The Book Depository grew significantly due to the free shipping it offered to more than 100 countries.

The merger faced opposition from trade bodies including the UK Publishers Association and the UK Booksellers Association, which cited monopoly concerns in online bookselling. Nevertheless, the British Office of Fair Trading approved the merger.

Amazon and The Book Depository represent key forms of external competition for the industry, as they are able to provide print book titles and digital versions to Australian consumers without maintaining a local presence.

Commenting on its Amazon alignment, McKee asserted the Book Depository “operates its own business with our own supply chain, fulfilment and website,” but is able  to benefit from the technology that the US giant has.

“We also partner with Goodreads, also owned by Amazon, so we get some benefits from that,” he said.

“Part of that is we sell on Amazon marketplaces worldwide, so work with them on an international basis.”

IBISWorld data shows that the online book sales industry has undergone rapid growth over the past five years as consumers are becoming more comfortable with e-commerce transactions and receiving items via delivery.

The global dominance of Amazon and its subsidiaries has limited industry revenue growth, with IBISWorld expecting industry revenue to increase at an annualised 12.2 per cent over the five years through 2021-22, to $234.0 million.

IBISWorld analysis says the industry’s international competitors have enjoyed favourable conditions over the past five years, who have benefited from the high Australian dollar at the beginning of the period and their ability to bypass PIRs, which prevent the mass importation of foreign-published books by local booksellers.

The decline of large-scale chains like Borders has also encouraged more consumers to shop online for books.

This story first appeared on our sister site, Inside Retail Australia

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