Amazon officially launches in Australia

IT’S finally, actually here — for real this time. After a frenzy of speculation, Amazon has officially launched its Australian website.

Amazon is finally here. Picture: Joe Castro/AAP

AMAZON Australia has finally launched.

After months of anticipation and a soft-launch late last month, the world’s biggest online retailer has officially kicked off its local store offering massive discounts on millions of items across more than 20 categories including electronics, toys, clothing, beauty and accessories.

“Thousands” of local suppliers, meanwhile, have signed up to sell their products through Amazon Marketplace, which generates about half of all sales globally for the e-commerce giant.

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

“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.”

Since 2013, Australian shoppers accessing the Amazon.com.au website have only been able to browse a selection of Kindle e-books and audiobooks. The rollout of the full Amazon offering — which excludes grocery delivery service AmazonFresh, for now — has had the local retail industry in a state of panic.

Amazon’s US website was already the second most visited retail website in the country, with 4.6 million Australian visitors in October compared with 6.7 million to Woolworths, according to online measurement firm Nielsen.

Analysts have estimated Amazon will undercut local prices by up to 30 per cent, leading to predictions of a pre-Christmas price war and accusations of “predatory pricing” from the likes of Harvey Norman boss Gerry Harvey.

Australian Competition and Consumer Commission chairman Rod Sims, however, has warned the watchdog won’t save local retailers from Amazon, describing it as “good for consumers” and saying “in competitive market, there will be winners and losers”.

Amazon’s 23 launch categories — understood to be a large selection compared with other launches — include baby, beauty, books, camera, clothing and accessories, DVD and Blu-ray, electronics, health and personal care, home, Kindle, kitchen, music, office products, PC, shoes, software, sports and outdoors, tools and home improvement, toys, video games, watches and wireless.

From today, Australian customers will also be able to purchase Amazon’s Fire TV streaming device for the first time. The device allows customers to access the Amazon Prime Video streaming service, which launched in December last year, as well as Twitch Prime.

The $US11-a-month Amazon Prime subscription package — which bundles together services including priority shipping, streaming and Kindle content — will not be available until mid-2018. Amazon’s Alexa and Echo voice-activated devices will be available in early 2018.

The Amazon Basics private label range, which includes everything from USB cables to puppy training pads and bath towels — will initially only be available across a range of consumer electronics products.

Amazon’s launch deals include Kindle e-readers starting from $109, Fire TV for $69, up to 30 per cent off toys including Barbie, Batman and Disney Cars, up to 20 per cent off Sunbeam kitchen appliances, 30 per cent off Calvin Klein underwear and Tommy Hilfiger polos, and a month’s supply of Huggies nappies for $65.

“Over time, we will create thousands of new jobs and invest hundreds of millions of dollars in Australia,” said Mr Braeuniger. “The result will be an ever-improving customer experience driven by the regular introduction of new products and services that we hope customers will love.”

Amazon will offer free shipping on all purchases over $49, with speed ranging from three to seven business days in most major cities and regional areas, to between seven and 10 business days elsewhere.

Customers in Sydney, Melbourne, Brisbane, Adelaide and Canberra will be able to pay $9.99 for one-day priority delivery, while customers in Perth and other cities and regional areas of Victoria, NSW and SA will have to pay $11.99 for shipping within two business days.

All other areas will have to pay $19.99 for priority shipping within one to three business days. The slightly slower, “expedited” shipping option ranges in price from $5.99 to $9.99, and takes between two to seven business days.

Shipping times for products bought through Marketplace depend on the seller. Amazon is aiming to eventually offer Fulfilment by Amazon — one of the fastest growing parts of the business — which takes delivery out of sellers’ hands, for a higher fee.

Amazon, which has had a local presence with Amazon Web Services since 2012, now employs more than 1000 people. Earlier this year, Amazon confirmed it was setting up its first Australian fulfilment in Melbourne’s Dandenong South. The company recently purchased 2.11 hectares of land in Sydney’s southwest, with speculation it could be the location of a smaller NSW fulfilment centre.

In September, analysts at Citi estimated the impact of Amazon’s arrival in the second quarter of FY18 could be $200 million, or 0.2 per cent of total retail sales.

Citi said the retailer was expected to maintain its strategy of matching or offering the lowest price in the market. “This could spark a response from incumbent retailers who are intent on not being beaten by Amazon on price during the key pre-Christmas sales event,” it said.

“In our view, lower pricing will likely be the result of Amazon’s lower margin and [return on investment] expectations, particularly in the short term.”

University of Chicago economist and Freakonomics author Steven Levitt, currently in the country to speak alongside Malcolm Gladwell at a series of seminars in Sydney and Melbourne, said the launch of Amazon was great news for Australian consumers.

“In the US, the combination of Amazon and Walmart, those two are incredibly efficient and brutal competitors, which as a consequence leads to very low prices combined with great service for customers, which makes customers go in droves,” he said.

“Consumers are greatly benefited by both the direct effect of those companies and the services they provide, but also the indirect effect, because it puts a lot of pressure on competitors to be better.

“I sure would not want to be a local business having to compete with Amazon. Amazon is brutal. They’re good at what they do. If I were a business owner, I’d be trying to think about how to work with Amazon as opposed to trying to fight them.”

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