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E-commerce

Confirmed: Amazon Marketplace coming to Australia

After much speculation, Amazon has finally confirmed its intention to enter the Australian market.

The e-commerce giant announced on its website today that Amazon Marketplace is coming soon to Australia.

Up to now, amazon.com.au has only sold Kindle devices, e-books and audio books, though many Australians can and do buy products on Amazon from the US and other countries.

But Amazon is now ramping up its local retail offering, inviting Australian businesses to inquire about setting up shop on Marketplace.

A spokesperson for the company detailed Amazon’s progress in the country so far: “Amazon Web Services launched an Australian region in 2012, we launched a Kindle Store on Amazon.com.au in 2013, and we now have almost 1,000 employees in the country.

“The next step is to bring a retail offering to Australia, and we are making those plans now.

“We are excited to bring thousands of new jobs to Australia, millions of dollars in additional investment, and to empower small Australian businesses through Amazon Marketplace.

“We are optimistic that by focusing on the things we believe customers value most – low prices, vast selection, and fast delivery – over time we’ll earn the business of Australian customers.”

More than 1000 Australian retailers, mostly small players in niche categories, already sell on Marketplace in the US and other countries. The company has said that around 50 per cent of its revenues come from third-party sellers.

Amazon charges third-party sellers a fee for selling through Marketplace, as well as for storage and delivery of products for sellers that opt in to Fulfilment by Amazon (FBA).

Amazon has not announced when FBA will be available in Australia, although the Australian Financial Review reported that the company is actively searching for a large distribution and fulfilment centre in Australia.

While much of the reporting about Amazon in recent months has centred on the threat it poses to Australia retailers, some in the industry have a more tempered view.

Speaking to Internet Retailing, Paul Greenberg, CEO of National Online Retailers Association, said Amazon Marketplace is just another channel for Australian retailers to reach their customers, like Ebay, TradeMe, or Alibaba.

“Marketplaces are a wonderful incubator not only for entrepreneurs but also established retailers. They help lift the game and open your businesses to new markets, customers and new ways of doing things,” he said.

“If it wasn’t for Ebay, there wouldn’t be a Deals Direct, Catchoftheday, or Kogan. They all had their start back in the early 2000s on Ebay.”

Greenberg admitted, however, that some businesses won’t survive the arrival Amazon: “If you don’t have a brand, but are just looking to trade, you’ll probably lose out to Amazon.”

The announcement today did not include any details about Amazon’s plan to launch other products, like Amazon Prime, Prime Now and Amazon Fresh, in Australia.

But if its behaviour in other new markets is anything to go by, the e-commerce company will roll out each new service after proving consumer demand.

An Amazon source, who no longer works at Amazon, previously told Internet Retailing that Amazon would likely test consumer demand for products with Prime Now, a one-hour delivery service that is not yet available in Australia.

The source said Amazon would launch the service in one of Australia’s major cities to start, with just a few fulfilment centres and several small, centrally-located delivery stations, enabling Aussies to buy a wide variety of items, including books, apparel, ink cartridges, vitamins and health food products and have them delivered in as little as one hour.

“It’s easy to enter a country or a continent through Prime Now because you don’t need massive distribution centres,” explained the source.

 

 

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