Amazon officially launches in Australia

As of today, millions of products in more than 20 categories ranging from clothing, shoes, beauty and homewares, to electronics, tools, toys and sports, are available for purchase on Amazon.com.au.

Hundreds of thousands of products are ready to ship from the online retail giant’s 24,000 square-metre warehouse in Melbourne’s south-eastern suburbs.

Meanwhile, thousands of Australian brands and businesses are selling items through Amazon Marketplace.

According to Amazon, this represents one of its biggest initial launches to date, with even more products, services and delivery options to come in the months and years ahead.

“Focusing on customers and the long-term are key principles in Amazon’s approach to retailing,” Amazon Australia’s country manager, Rocco Braeuniger, said in a statement.

“By concentrating on providing a great shopping experience and by constantly innovating on behalf of customers, we hope to earn the trust and the custom of Australian shoppers in the years to come.”

FBA and Prime still to come

Notably absent from today’s launch are Fulfilment by Amazon (FBA), a warehousing and fulfilment solution for Marketplace sellers, and Amazon Prime, a loyalty program that offers members unlimited free shipping on eligible products, video and music streaming services, access to exclusive products, among other benefits.

Amazon Prime is set to launch in mid-2018, while FBA is said to be coming soon.

Sellers that use FBA in other markets say it’s valuable for several reasons, including lower freight rates, thanks to Amazon’s economies of scale, and intelligent distribution.

Amazon has not said when or where it plans to open other warehouses in Australia, but Braeuniger confirmed the company plans to invest hundreds of millions of dollars in the country and create thousands of new jobs.

Retail impact

The launch today confirms that electronics, fashion, sporting goods and toys will be among the hardest-hit categories, with retailers like JB Hi-Fi and Harvey Norman bearing the brunt of Amazon’s arrival. Categories such as auto and grocery are unlikely to see an impact in the short-term.

The eCommerce giant is already selling several big toy brands, such as Barbie, Batman and Hot Wheels, for up to 30 per cent off the recommended retail price. Calvin Klein men’s and women’s underwear is up to 30 per cent cheaper on Amazon, and Sunbeam kitchen appliances are up to 20 per cent cheaper.

According to a recent UBS report, the eCommerce giant could steal two per cent of retail sales within five years of entering Australia, growing revenues from more than $400 million to about $3.5 billion by 2023.

Shipping

Until now, the biggest question mark surrounding Amazon was its delivery offering in Australia, with some skeptics wondering whether the retail giant could support free same-day or even two-day delivery nationwide.

We now know that Amazon has partnered with several shipping carriers to offer a range of delivery options in Australia, depending on customers’ locations.

Those in Sydney, Melbourne, Brisbane, Adelaide and Canberra can pay $9.99 for priority delivery (one business day) and $5.99 for expedited delivery (two-three business days), while those in Perth and other areas of VIC, NSW and SA can pay $11.99 for priority (one-two business days) and $7.99 for expedited delivery.

Free standard delivery (three-seven business days) is available on orders over $49, except in remote areas of NT, QLD, WA, SA and TAS, where delivery may take longer than 10 business days.

More delivery options, including Prime Now – a same-day delivery service in metro areas – are expected to become available in future.

Heather McIlvaine, Editor, Internet Retailing

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