Watch out, the big boss is here: Amazon Australia

Watch out, the big boss is here: Amazon Australia

Amazon isn’t just a juggernaut in the west anymore and it’s dropping some serious ripple effects in the Australian retail sector. The online marketplace giant, albeit having a slow start in 2018, is seeing tremendous progress in 2019 and consumers, competitors and marketers alike would be smart to watch the space grow.

Australia’s e-commerce market is pretty darn huge (and that’s still an understatement). Australia Post’s research on e-commerce behaviour in the country states that by 2020, one in every 10th purchase will be made online. To add fuel to this raging fire, marketplaces are growing exponentially with retailers such as eBay, Etsy, RedBubble and now Amazon taking advantage of consumer’s online expenditure.

But with US Amazon’s deep pockets, what does its expansion to Australia mean?

For starters, although the Amazon Australia experienced a slow start, it was, by far, the fastest growing marketplace expansion with 5000 sellers jumping into the bandwagon within the first 45 days of its launch in the country. With Amazon Australia growing, competitors aren’t too happy. Retailers have found that sales on Amazon for the same products have increased and proportionately decreased on eBay.

But eBay isn’t the only competitor who should be worried.

Supermarket chains may also find themselves having a bit of cold sweat. Currently, Amazon Australia is undercutting supermarkets by as much as 50% on household goods, quickly gaining a foothold. With over 65% of Australian’s shopping online, current e-tailers may find themselves in a bit of a rut with Amazon’s service of wide-ranging products and quick delivery.

Yes, Amazon may not have the prettiest of websites, but the plethora of retailers and attractive prices make it a competitor hard to beat.

Can marketplaces like Myer and online retail platforms like Big W, Kmart and Target be bold enough to take on Amazon? Surely, Amazon’s competitors have their work cut out for them and offline points of purchase are not excused, either. This means that physical stores need to up their experience and destination value whilst e-tailors have to strive hard to catch eyeballs that are swaying to the side of Amazon.

Amazon’s marketplace isn’t the only explosion to rock Australia. With Amazon’s Alexa (watch out, Google Home), adtech offerings and even financial services, the retail giant may very well threaten more than the retail sector.

Although Australia may not move Amazon’s revenue needle significantly (given its already established 13 marketplaces across the world), it’s certainly taking advantage of the country’s blossoming e-commerce-fluent industry.

2019 will be a year of successes for Amazon and the future looks pretty darn good, too.

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