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E-commerce

UPDATE: Amazon launch downplayed

Last week’s speculation that Amazon will begin selling general merchandise as well as fresh groceries in Australia as of September 2017 has been described as improbable by two sources with knowledge of the e-commerce company’s plans, who spoke to Internet Retailing.

“Based on my knowledge of what Amazon is planning for Australia, Singapore and South East Asia, I just don’t see how it would be possible for Amazon to enter Australia and offer all of its services within six months,” an Amazon employee who wished to remain anonymous said.

Paul Greenberg, founder and director of the National Online Retailers Association (NORA), also described the launch of Amazon’s end-to-end e-commerce solution as unlikely.

“If the question is whether a full end-to-end Amazon solution is coming to Australia, my answer is not any time soon,” he said, citing insight from Amazon leadership via a reliable third party.

“Our intel is that the marketplace model is still very vibrant and Amazon is looking to get more Aussie retailers signed up as merchants on its marketplace. Certainly, it is also looking to sell products into Australia, but itis already doing this on a large scale [through other storefronts].”

When asked for comment on the rumoured launch, an Amazon spokesperson told Internet Retailing: “We have a long standing practice of not commenting on rumors and speculation.”

The original article on the rumoured launch appears below:

Amazon will begin selling general merchandise as well as fresh groceries in Australia as of September 2017 the Australian Financial Review has revealed.

The US e-commerce giant was planning to launch here in March, but decided to push back the start date in order to include fresh goods in its offering, according to Justin Braitling, chief investment officer at Watermark Funds Management, who spoke to AFR on the basis of a special briefing he received from the person responsible for rolling out the plan.

Braitling would not disclose the name of the person he spoke to.

26/04/17 UPDATE: Amazon has issued the following statement about the anonymous source quoted by the AFR.

“The person who made this statement, Brittain Ladd, left Amazon in February after just two years. He was never involved in our planning for Australia and has no actual knowledge of our plans. His comments do not reflect our views. Our focus is on providing the best shopping experience we can for customers all over Australia.”

Amazon currently sells only books and e-books in Australia, but it offers over 200 million products in the US and accounts for US$1 out of every $US2 e-commerce sales in the US.

Now that Amazon is setting up distribution centres and performance centres (fulfilment centres that handle goods bought on the site from third parties) in every state in Australia, shoppers will soon have access to the company’s full range of products without having to pay high shipping fees.

Braitling also said that the e-commerce company will be putting physical stores on the ground in regional areas.

“We spoke to the guy rolling out Amazon’s business here in Australia and in his words: ‘We are going to destroy the retail environment in Australia’,” he told the AFR.

According to Braitling’s recollection of his conversation with Amazon, the e-commerce company sees enormous potential in Australia due to high prices. He said the company’s motto essentially is ‘your margin is our opportunity’ and that it plans to undercut prices by 30 per cent.

While Braitling said retail stocks in the US are priced relative to the perceived risks to their business from Amazon, Australian investors are unprepared for the arrival of the online giant.

The Australian Financial Review attempted to reach Amazon for comment and is awaiting response.

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