Amazon and Australian shoppers
Australia Is still Waiting For Amazon To Hit The Accelerator
After a sleepy start, Amazon announced in June that Aussies would soon no longer be able to shop from its international sites.
The Seattle giant pinned the blame on the Australian government’s decision to force online retailers to capture a ten per cent tax on all goods bought overseas (previously GST had not applied for purchases under $1000).
Amazon’s GST announcement — which came almost six months after the company launched its retail offering in Australia — shows it’s still finding its way and is yet to have a made a significant mark on Australian retail.
But the sound and fury which ensued brought to mind a common refrain used by Amazon execs: “We’re willing to be misunderstood for long periods of time.”
The true test of Amazon’s might in Australia, according to retail experts, will be the uptake of Prime when it launches later this year.
Amazon’s early moves in Australia also highlight the distinction between how outsiders see Amazon and the way it sees itself. Take Amazon’s launch in early December 2017, for example. What was the most successful international launch in its history was judged a disappointment by consumers and media who had been anticipating more choice, sold cheaper and delivered faster than any other Australian retailer.
That expectation was unrealistic, argues Deloitte’s head of retail, David White.
“People were looking at a very mature business in the UK or the US and thought they could pick it up and move it to Australia, which was never going to be the case,” White told Which-50.
“If you ask people from Amazon they will say it’s actually the most successful launch they’ve ever had internationally in terms of number of SKUs and how quickly they got it up and running.”
Juozas Kaziukėnas, founder of Marketplace Pulse, which tracks the performance of eCommerce marketplaces, said Amazon launched in Australia with an MVP (Minimum Viable Product).
“Everyone looked like they were expecting Amazon to have Prime on day one, best prices on day one, and full catalogue on day one. That is impossible. Instead, Amazon launched a minimum viable marketplace web site and are slowing building the assortment and pricing. Marketplaces take time to build organically,” Kaziukėnas said.
Right now Amazon is focused on building out SKUs, getting the pricing and delivery right.
With thanks to Tess Bennett/ which-50
Online shopping represents 8%
According to a recent report by Australia Post, online shopping represents 8% of total traditional retail sales. That same report predicts that by 2020, 10% of physical goods will be purchased online.
That means, in two years’ time 90% of physical goods will be purchased from bricks-and-mortar stores. At that rate, we could see it at 80% by 2030 and 70% by 2040. As such 2019 is certainly not going to see the end of bricks-and-mortar retailing, nor does that end look like happening anytime soon.