Small business divided on looming “Amazon Effect”

Australian small-business owners are conflicted with the possible “Amazon effect” with the prospect of big overseas businesses such as Amazon entering the Australian market, according to new MYOB research.

The latest SME Snapshot from the cloud accounting provider found that over a quarter (27 per cent) were concerned about the prospect of encroaching overseas competitors, while 26 per cent were feeling positive about the arrival of these competitors.

Tim Reed, CEO of MYOB, says the nervousness around overseas competitors can be put down to the unknown.

“Our SME community is extremely resilient – the proof being their strength in the face of constant changes to our market. While there is some hesitation around new players to the market, business owners will need to assess the impact once they have arrived, and as they have always done – adapt to this change in order to remain commercially competitive.”

A majority of SMEs believe additional overseas businesses in the local market will force them innovate (57 per cent), while many believe the key impact will be the loss of customers (43 per cent) or revenue (43 per cent).

“Australia has been tipped for the launch of a number of overseas retail outlets this year and our business owners are telling us they’re not sure how the advent of these newcomers will play out in the market,” Reed says.

“It is heartening to see they’re thinking proactively about this, and as usual – looking to rise to the occasion and meet greater competition in the market via innovation. However, the findings show us that there is still a ways to go to settle concerns around customer and revenue impact, especially given the wider global environment they’re now playing in.”

Business competition rife in the city vs country debate

Closer to home, SMEs also feel as though they are competing for the national interest, with 42 per cent believing State and Federal Governments give more emphasis to metropolitan SMEs over regionally-based business.

Furthermore, 59 percent agree regional SMEs were “quiet achievers”, with regional SMEs more likely to agree with this statement (at 76 per cent) than their metropolitan counterparts (49 per cent).

“Even in our own backyards, competition is rife in the SME sector, with many regional small businesses feeling unfairly overlooked by State and Federal Governments in favour of metropolitan businesses,” Reed explains. “SMEs are the heartbeat of their local communities, whether they’re based in regional South Australia or the centre of Sydney. For the continued success of Australia’s vibrant SME sector, it is important policy decisions are designed that benefit the many, rather than a few.”

Inside Small Business