Amazon has boosted the sales of its Amazon Prime subscription service in Australia to help lift local revenue
The popularity of Amazon Prime TV shows like The Lord of the Rings: The Rings of Power and Fleabag have boosted subscriptions in Australia.
US online retail giant Amazon has almost doubled its sales in Australia and is quickly racing to annual revenues of $3bn as a sharp uplift online trading through the tail end of the Covid-19 pandemic and a boost in popularity for its subscription service Amazon Prime, fuelled by popular dramas such as The Rings of Power, has pumped up its local revenue.
Accounts lodged by Amazon Commercial Services, the global corporation’s key business arm in Australia, show that for calendar 2022 Amazon had revenue of $2.629bn, up from $1.75bn in 2021.
Since its formal arrival in Australia five years ago and the rapid construction of warehouses and distribution centres on the outskirts of key east coast cities, revenue for Amazon Australia doubled to just over $1bn in 2020, then surged to hit $1.75bn in 2021 and is now almost at $3bn.
Although the US giant did post a larger loss in Australia of $32.745m, up from $25.7m in 2021, the loss is immaterial to the US company which is valued at more than 1 trillion dollars.
Amazon’s revenue in Australia has raced through Covid-19 lockdowns, fuelled by a sales boom at its online marketplace, its subscription service Amazon Prime, and its library of music, TV series and movies.
In three years revenue derived from subscriptions, led by Amazon Prime, has risen fivefold. The streaming market remains highly competitive with offers of original content, blockbuster movies, TV shows and sport.
The Australian accounts reveal that Amazon’s online store sales rose to $1.29bn in 2022 from $883m, in 2021 with a strong lift too in sales for businesses that use Amazon as a marketplace. Those third party seller sales rose to $316.9m in 2022 from $181m in the previous year.
Importantly in the battle among streaming services led by networks such as Netflix and Apple there was a large increase in sign ups for Amazon Prime, its subscription service that delivers deals on online orders and streaming, with Amazon subscription services in Australia generating revenue of $246m in 2022 up from $155.245m in 2021.
Amazon Prime was launched in Australia in June 2018.
A spokeswoman for Amazon told The Australian since launching its retail business in Australia in 2017, it has invested in providing the best possible experience for its customers and the thousands of businesses that sell in its online store.
“In the last year alone, we doubled our operational footprint to enable faster delivery and launched free one-day delivery on eligible items for Prime members in the majority of postcodes in Sydney and Melbourne.
“We’ve also grown the number of products in our store to more than 200 million and we’re proud to offer great value through our competitive prices and shopping events throughout the year.”
There are more 200 million products are now available on Amazon.com.au across 31 categories with the selection continuing to grow. Amazon Australia believes that Australian businesses selling on Amazon globally have created more than 20,000 jobs in Australia to support their Amazon-related business activities.
The growth of Amazon in Australia, through its online marketplace as well as special delivery deals and streaming services offered under its Amazon Prime platform, has come as local pureplay online retailers battle it out for marketshare.
Home grown online specialists such as Kogan.com, Catch Group and Temple & Webster enjoyed accelerated growth through Covid-19 as shoppers locked down in their homes or cities turned to online shopping.
However some of those local online businesses have since suffered slowing sales and earnings, or dipped heavily into losses, while the US giant Amazon can withstand sizeable losses for years as it sets about building market share in Australia.
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