Amazon's arrival sounds wake-up bell for Australia's sleepy retailers
Amazon's arrival sounds wake-up bell for Australia's
sleepy retailers
By Byron Kaye | SYDNEY Thu Apr 20, 2017 | 12:56am EDT
Global e-commerce juggernaut Amazon.com Inc on Thursday
said it will open its online shopfront service in Australia, ending rumors
about its plans and increasing the pressure on the domestic retail sector to
catch up with the digital economy.
The announcement fires the starting gun on a new era of
competition between bricks-and-mortar and online retail in the world's
12th-largest economy, where 80 percent of the population live in cities and
more than 90 percent have home internet.
Shares of electronics and appliances retailer Harvey
Norman Holdings Ltd and department store chain Myer Holdings Ltd slumped 3
percent, while electronics merchant JB Hi-Fi Ltd lost more than 1 percent in a
flat overall market.
"The pie's not really growing, so the natural conclusion
is that the players in that market will have their market share reduced,"
said Danial Moradi, an equity strategist at Lonsec Research.
Investors seemed to be taken by surprise by the timing of
the announcement even though Australian retailers and consumers have long
anticipated the arrival of the world's biggest seller of goods.
The speculation grew in recent months when Amazon posted
more than 100 advertisements for jobs in Australia, and it has registered
hundreds of trademarks in the country.
The Seattle-based firm finally declared its hand by
saying that, after offering its internet cloud service in Australia in 2012 and
an online e-book store in 2013, "the next step is to bring a retail
offering to Australia".
"We are excited to bring thousands of new jobs to
Australia, millions of dollars in additional investment, and to empower small
Australian businesses through Amazon Marketplace," the company said in a
statement, referring to its online shopfront.
Daniel Mueller, an analyst at Forager Funds Management,
said Australia was "ripe for picking" by Amazon because its retailers
had lagged their global peers online.
About 7 percent of Australian purchases were online,
while the rate in the United States, Britain and Germany was over 10 percent,
he said.
The Australian operation would be the U.S. giant's fourth
Amazon Marketplace in Asia after China, Japan and India and its 12th globally.
It has three Amazon Marketplaces in the United States and five in Europe.
(Reporting by Byron Kaye; Editing by Stephen Coates)
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