Amazon Australia: World’s richest man Jeff Bezos company fails to make mark in Oz
The company that made Jeff Bezos the richest man in the world has failed to make the same mark on Australian soil, despite fears it would destroy local business.
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The company that made Jeff Bezos the richest man in the world has failed to make the same mark on Australian soil, despite fears it would destroy local business.
Amazon Australia celebrated its first birthday, but according to a bombshell report by news resource for e-commerce retailers Power Retail, only 6 per cent of consumers have engaged with the online giant.
Amazon is the biggest e-retailer in the US, hitting $1 trillion value last year, only the second American company ever to do so after Apple, and growing founder Jeff Bezos’ fortune to almost $150 billion.
It’s another blow to Bezos who has also announced his divorce from wife MacKenzie, who will become the richest woman overnight once the divorce is finalised.
Power Retail managing director Grant Arnott said he thought Amazon had been ambitious thinking they could reach the same level of success in Australia, considering their current success is 25 years in the making.
“I think the expectation was they were going to replicate everything they spent 25 years building in US, which is a bit unrealistic,” he said.
“Some of the consumer dissatisfaction is interesting. Going back to 2017 leading into Amazon’s launch in Australia there was this impression among the public that they were going to take over invasion style and customers would come in droves.
“It’s silly to think Amazon is no threat but it’s certainly shaping up to be more of a slow burn than the takeover analysts predicted initially.”
The nationwide research initiative surveyed over 1,500 Australian online shoppers who had made a purchase in the past six months and interviewed 89 retailers.
The Power Retail survey also found that 68 per cent of consumers did not think Amazon products were the most competitively priced.
The research found that people who had purchased on Amazon Australia gave it a Net Promoter Score (NPS) of –7.
Amazon US has an NPS of 61 and the online retail industry NPS benchmark is 35.
Mr Arnott said this is largely due to the lack of systems set up in Australia.
“There are factors which have not enabled Amazon to lower their prices — in the US they’ve got buying power, logistics, infrastructure and high-speed cost effective deliveries,” he said.
“They are yet to establish that in Australia.
“They’re actually using the same logistics any other merchant would be using — Australia Post or Toll.”
Amazon Australia also faced public backlash when they blocked Australian purchases from Amazon US to avoid GST.
They were forced to backflip on the decision after less than six months.
The Daily Telegraph reached out to Amazon Australia for comment and they replied with their year one trend analysis, which is available on their website.
The report is fronted by country manager, German Amazon director Rocco Braeuniger.
The report gave details on products that are available, new products and features that were introduced during the year, how many products and sellers are available and the most popular products over the year.
It did not give any figures or statistics on sales or whether they had hit their first year targets.
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