SYDNEY (Reuters) – Amazon.com Inc is “really close” to opening in Australia, its country manager said on Monday, as the U.S. e-commerce juggernaut prepares to shake up an already-fragile brick-and-mortar retail sector in the world’s No. 12 economy.
While Amazon did not give an exact start date, the remarks from Rocco Braeuniger suggest the company will ship goods from its first Australian warehouse in time for the end-of-year holiday season, a moment seen by analysts as a tipping point for Australia’s staid retailers.
“Let me tell you we are getting really, really close,” a jeans-wearing Braeuniger told about 600 prospective product merchants at an open day on the Sydney waterfront, held to encourage merchants to sell on its website.
Since confirming plans to open in Australia in April, Amazon has signed up “many thousands” of sellers, added Braeuniger, who relocated from his native Germany for the role in August.
Australians can already buy Amazon products from offshore, but having a warehouse locally cuts sometimes sizable international shipping costs, adding to pressure on retailers already struggling with the overheads that come from maintaining shopfronts and employing checkout staff.
Earlier this month, Australia’s top department store chain Myer Holdings Ltd cut its growth targets, citing weak trading conditions, while rival David Jones recently contributed to the first profit decline in eight years for its owner, South Africa’s Woolworths Holdings.
In a sign of further headwinds for offline retail, Braeuniger said his $540 billion company planned to bring more services to Australia, from the outset, than it had previously flagged.
While Amazon said earlier that it would offer Australia its “marketplace” service, where retailers hire Amazon’s infrastructure but run their own sales, Braeuniger said the company would also run its own retail unit, ordering and shipping its own product.
He suggested Amazon would wait, however, before taking on Australia’s grocery market. The firm took years to offer the service in other countries and “it’s really, really complicated to make fresh food delivery a great customer experience”.
Amazon, among the latest tech heavyweights to expand in Australia, has snapped up a sprawling nine-floor office in Sydney’s financial hub, with sweeping views of the Harbour Bridge and Hyde Park.
In August, it said it had picked a distribution warehouse in Australia’s second-largest city Melbourne, also on the east coast where about four-fifths of the country’s 24 million people live.
Amazon in Australia might not be the end of retail as we know it https://t.co/vJUURkym7P
— A/Prof Gary Mortimer (@The_Grocery_Dr) September 4, 2017
By Byron Kaye