Sydney first cab off the rank for Amazon’s same-day deliveries

The US tech titan is launching a service in Australia previously only available to those who could afford expensive couriers.

Amazon has chosen Sydney as the first Australian city to launch same-day deliveries, as it invests an extra $1.6bn in its local network and recruits fast bowler Mitch Starc as its “chief speed officer”.

The US tech behemoth, which launched its marketplace in Australia in 2017, says it and other online retailers have saved households more than $3400 each during a three-year period, helping ease the cost of living.

Its surge in popularity in Australia has come amid criticism it would crush smaller operators and delivery operators such as Australia Post. Former US president Donald Trump has been one of its strongest critics, blaming the $US1.87 trillion ($2.78 trillion) company for the demise of the US Postal Service.

But, Amazon Australia boss Janet Menzies said it was supporting, not harming, businesses, with online shopping overall injecting an extra $1.4bn in revenue for Australian online retailers in the past decade.

The sum is based on research from Mandala Partners, which Amazon commissioned. The study says online shopping — and faster deliveries — have been strong contributors to the Australian economy.

In the past three years, according to the research, online prices have fallen almost 3 per cent, largely from increased competition in the sector. This is despite the Reserve Bank struggling to tame inflation in other parts of the economy, leading to the most aggressive series of interest rate hikes in 30 years.

Janet Menzies, Amazon Australia CEO.

Ms Menzies said it was difficult to “tease out” shopping habit trends from Amazon’s vast customer base — given new companies such as Dyson were joining the platform, rapidly expanding its range.

But, she said its subscribe and save program, which offered people discounts if they automated orders for everyday essentials, had surged 40 per cent year-on-year.

“That gives you a sense that we know customers are looking for value,” Ms Menzies said.

“We’re also very invested in local sellers and trying to help small businesses in Australia digitise, and so for us we’re going to keep raising the bar by providing that wide quality selection.”

Across all its divisions Amazon has invested more than $15bn in its local operations, and is spending another $1.6bn on five new fulfilment centres — which will be spread across NSW, Victoria and Queensland, and be operational by 2026, employing 4500 people.

Ms Menzies says this network investment has allowed Amazon to speed up deliveries. Earlier this year, it expanded its Prime one-day delivery service to Brisbane and key regional centres. Now it says its Prime members can order from a selection of more than one million products as late as noon for delivery before 10pm the same day.

And Ms Menzies said other delivery companies had been lifting their game as a result.

“We have been around 6½ years,” she said. “A number of our competitors have really started to invest quite significantly because they knew we were coming. And so sometimes I feel like we’ve inspired other competitors to improve their offers.”

According to the Mandala research, delivery times have almost halved in the past decade, falling by an average of 3.7 days.

“That’s a real reflection of the hard work that’s been done in the sector,” Ms Menzies said.

Amazon Australia boss Janet Menzies has launched same-day deliveries in Sydney.

Mandala says this added an extra $350m in consumer value, largely from improved convenience and time saved. Overall, about 3.7 million hours have been slashed from shopping trips.

For businesses, Mandala says faster deliveries have bolstered revenue by $1.4bn in the past decade, and generated more than $400m in cost savings via “swifter access to inventory”.

On this score, the arrival of Amazon in Australia is akin to the launch of McDonald’s in the 1970s, rather than the lacklustre performance of another Seattle-based company: Starbucks.

“I actually spent seven years working at McDonald’s. I started there when I was 15, and I was determined to be a McDonald’s franchisee,” Ms Menzies said.

“I can’t speak to Starbucks. What I can tell you is that we have been pleased with the response to the offering, and I think that that’s because Amazon’s very focused on value.”

Mitchell Starc has been appointed Amazon's 'chief speed officer'.

Amazon has recruited Starc, who will deliver a “haul of cricket goods” and $1000 Amazon gift cards to two Sydneysiders as part of a social media competition to promote the new services.

“As one of Australia’s fastest ‘deliverers’ I know speed matters, and that’s why I am proud to come on board as Amazon Australia’s chief speed officer just in time for the launch of same-day delivery in Sydney,” Starc said.

“What sets this service apart is the range of products available, from the cricket ball for Test training to a massage gun for the recovery session.”

Ms Menzies said she did “not have a crystal ball” about what other Australian cities would receive the same-day delivery service but said “we won’t stop” in Sydney.