Amazon flexes its online sales muscle through lockdowns

Lockdowns have seen a boost to Amazon’s retail business in Australia with a 17 per cent increase in online shoppers in a year.

The pandemic has been kind to the online retail giant with about 30 per cent of those who bought from Amazon Australia in the past 12 months citing lockdowns as one reason why they purchased there. Picture: Bloomberg

Lockdowns have seen a boost to Amazon’s retail business in Australia with a 17 per cent increase in online shoppers in a year.

A survey by global e-commerce specialist Pattern found the number of online shoppers using amazon.com.au grew from 30 per cent to 47 per cent in the past 12 months.

The pandemic has been kind to the online retail giant with about 30 per cent of those who bought from Amazon Australia in the past 12 months citing lockdowns as one reason why they purchased there.

The survey results represent a longer-term vindication for Amazon since it entered the Australian retail space in 2017.

In its early days of home deliveries its offerings in many categories were sparse and it struggled to match prices of Australian retailers. It also lacked supply chains and warehouses to quickly dispatch goods to shoppers.

That has changed over time, and the impact of Amazon has seen rivals Woolworths, Coles and others introduce more efficient home-delivery services.

The local Amazon operation has come into its own. Pattern says in 2019 more Australians were still usingAmazon.com than buying from the localised Australian site. This has flipped, with 13 per cent reporting they had bought from the US site last year, down from 35 per cent in 2019.

e-commerce summit graphic for TAUS business

Pattern says the findings support data from web traffic analysis site SimilarWeb that shows monthly visits to Amazon.com.au rose by 49.5 per cent between February and July.

There is also good news for online retailers generally. While shoppers have spent less overall during the pandemic, only 7 per cent say they have spent less online, while 53 per cent say they have purchased more online. There was however an ongoing deterioration in offline (physical store) visits.

A third of shoppers predict they will spend less on shopping for the rest of the year due to COVID-19, but only 11 per cent say they will spend less online.

About 46 per cent expect to buy more online. If this trend continues the pandemic may lead to a permanent increase in the proportion of online shoppers.

In the case of Amazon Australia, the percentage of consumers buying rather than just scrolling through items on sale also increased. While there was only a small increase in shoppers visiting amazon.com.au, the percentage of buyers grew by more than a half. Some 60 per cent say they visited the Australian site to check the prices of products.

Some 18 per cent of Amazon’s Australian shoppers cited Amazon’s premium Prime service as a reason they bought from the site. Sixty-five per cent said free delivery was a reason for using Prime.

The report said Amazon had benefited from the closure of physical stores, but some don’t see Amazon as a threat to local retailers.

A report early this year by UBS analyst Ben Gilbert argued that local retailers were well positioned to capture share and leverage store networks, and while Amazon was gaining traction, the range of goods it offered remained a key inhibitor to it usurping local retailers.