An email sent by Amazon third-party sellers indicates that the US retailing giant will begin selling on its Australian store today, with the obvious intention of stepping up things alongside Black Friday in the US.
Business information research IBISWorld said Amazon had emailed sellers asking them to be ready by 2pm today for a soft launch of Amazon Marketplace.
This could mean that full-scale trading will begin either on Black Friday or else on Cyber Monday, 27 November.
“Amazon’s imminent arrival into the Australian market is set to shake up the retail sector,” said Kim Do, senior industry analyst for IBISWorld.
{loadposition sam08}“The company intends to challenge domestic retail prices by offering items for 30% less than domestic retailers. This is expected to appeal to price-conscious Australian consumers, and is likely to affect local retailers that have found it difficult to adjust to a shift in consumer spending behaviour over the past five years.”
The research group said with Amazon's entry, Australia's online shopping industry was expected to grow at an annual rate of 13.5% over the five years to 2017-18, to reach $20.1 billion.
"Although Amazon has largely kept its plans for the Australian market under wraps, IBISWorld expects Amazon will be prepared to make initial losses to help it gain market share within Australia’s online retail sector as quickly as possible," the group said.
Do said: “The company is expected to focus on providing consumers with low prices, a diverse product range and fast delivery
“However, to be successful in Australia, Amazon’s current business model will need to be adapted to the Australian market. For example, Australia’s large geographical size and dispersed population will lead to higher distribution costs compared with Amazon’s home market in the US. This is likely to limit the company’s ability to offer Amazon Prime Shipping services in the short- to medium-term.”
IBISWorld said believed department stores and electronic goods retailers would be hardest hit by Amazon’s arrival with its data showing department stores were already struggling to attract consumer demand, with revenue expected to fall by 0.9% annually over the five years through 2017-18.
“Technology products are anticipated to be the highest selling category for Amazon, which will disrupt the electronic goods industry," said Do.
"Australian consumers are particularly price savvy when it comes to electronic goods, and will often compare prices across multiple retailers to find the best value. As a result, Amazon is expected to take market share away from local electronic goods retailers such as JB Hi-Fi and Harvey Norman."
But while Amazon will disrupt the Australian retail sector, IBISWorld said it believed there would also be some positive changes to Australia’s ecommerce landscape, including increasing the uptake of online shopping.
"Currently, Australian online sales are expected to account for an estimated 7.4% of total retail spending, although this figure is projected to reach 15.0% by 2022-23," the research group said.
"Amazon’s arrival can also be seen as an opportunity for existing Australian retailers, with the online retailing giant expected to help drive innovation relating to digital transformation, logistics optimisation and multichannel platforms. Amazon will also provide some retailers with another platform to sell their goods."