How Will Amazon Impact Australia?

This week several sources confirmed with Power Retail that Amazon requested them to get ready to start trading on the Amazon Marketplace from 2pm today for its soft launch, asking them to ensure their pricing and stock were up to date, as well as cross-check other details. Sellers have been told not to disclose information, but the leaks have turned into a flood as excitement builds.

So, the time has come and the A-train is upon us, with Amazon’s official launch tipped to be tomorrow Friday 24th November, which will coincide with Black Friday, which in the US kick starts the official holiday shopping season.

Launching in Australia on Black Friday would make sense for Amazon, given that in the US it has long marked the start of the holiday shopping season. Black Friday has now turned into one of the biggest trading seasons in the US, for both online and bricks and mortar stores. The company is now looking to capture that success in Australia.

I caught up with some of our industry heads to see what their thoughts were around how Amazon will impact Australia?

Gabby Leibovich, co-founder of Australian e-commerce business Catch and recently launched Catch Marketplace says that while Amazon will create a lot of disruption in Australian retail, he’s pretty chuffed it is finally here as it will grow the online retail pie. “Amazon’s arrival is great for online retailers and companies who hold goods in warehouses. In every market that Amazon has entered in the past online market share has more than doubled within a couple of years.”

Leibovich expects that Catch.com.au will leverage off this and grow as a result. “Catch.com.au has an amazing network of goods supply and distribution and as such will be a great beneficiary of this projected growth. The market is about to be shaken, and any time of disruption creates alot of opportunities. We have proven in the past again and again that we are always ready to pounce on such opportunities.”

Other retailers like Nathan Huppatz, co-founder of online retail store Costumes.com.au, who are currently integrating onto the Amazon Marketplace, says it will be interesting to see how Amazon will affect the marketplace structure in Australia and the percentage it will take.

“Now that Amazon is going to here for the long haul, we’ll be committing some effort to add our range to the platform and see what we can get out of it. We know that it’s a marketplace that is very customer focused and therefore customers like to purchase on there, so it will be interesting to see in a year or two’s time what the mix of sales is between the various marketplaces around Australia,” says Huppatz.

Other retailers like Australian owned eco-friendly e-commerce business Flora & Fauna say that while Amazon will grow the e-commerce pie – it will be a major disruptor, with some categories likely to suffer much more than others.

“Amazon is absolutely going to be a disruptor and will, eventually, bring more focus to online shopping which is a good thing for the consumer and retail. For some categories, price will become more competitive but this will be when, I believe, Amazon opens up their own range and other markets to Australia,” Julie Mathers, founder of the business tells Power Retail.

Mathers, however, says that Flora & Fauna won’t be distracted by the Amazon test launch when the two biggest months of retail trading is upon us. “The initial launch from my understanding is that local sellers will be testing the platform but many of these sellers are already selling on eBay so what’s the difference other than a different platform? The real heat in the kitchen will start when consumers can access cheaper prices from overseas and FBA (Fulfilment By Amazon). Service, speed and a point of difference is crucial along with keeping a steely eye on your customers at this critical time of the year. You can easily get distracted by an Amazon test launch when you need to be focusing on your own business and your customers in the two biggest trading months of the year.”

Phil Leahy, CEO of retail event firm Retail Global, which operates in both the US and Australia predicts that Australians will embrace Amazon. “As a former leading Amazon seller in the UK market, I am beyond excited that the day is finally here.”

“Don’t be fooled about the observations drawing on the Canadian similarities as a mirror for Australia.  Although it will take some time for Amazon to work its fully modeled marketplace offer, my bet is Australia will embrace Amazon. Australians are noted early adopters of the new and after years of press speculation, the stage is set for a strong opening.”

Leahy says that its high time Australian consumers had more choice when it comes to retail, inviting the competition and innovation that Amazon will drive locally. “Australian consumers deserve choice and competition that will help drive retail innovation.”

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