Despite making its entry into the Australian market in 2017, ecommerce giant Amazon is yet to establish itself as a household name down under in the same way it has in the USA.
The slow start for the company’s Australian operation was in part due to a disagreement with the Federal Government over GST on overseas orders last year, but with its strategy now set, one ecommerce expert expects Amazon Australia to make its multi-billion-dollar presence felt on the Australian market sooner rather than later.
“Any business that has such a long-term view and doesn’t see annual profit as the major driver of the long-term strategy, I would always watch out for,” said Criteo commercial director AUNZ Colin Barnard.
“Amazon has the absolute capability of getting it right.”
Barnard, who advises large ecommerce companies on how to drive sales as part of his role, attributed Amazon Australia’s slow start to the difficult logistics conditions in Australia and a supply market used to duopolies and oligopolies.
He also suggested Amazon may have been a victim of its own success.
“We have very high expectations as consumers,” he said. “We had access to Amazon’s global store so we thought the ranges and the prices were going to be there.”
“And then when the local operation was developed, the range wasn’t there, which is understandable, and it went with a marketplace first strategy, which meant they were at the behest of the ranges provided.”
But there is a sense that the tide is beginning to turn for Amazon Australia.
The company’s annual online shopping event Prime Day is approaching, with the company unveiling a number of deals specifically for Aussie shoppers.
“I’m 100 per cent sure Amazon will get there,” Barnard said about the company becoming successful in Australia.
“I just wonder how many people will have given up on the way through and will need reminding that things have changed.
“It’ll need a big push to remind people: ‘okay we missed your expectations but we’re here now.’
“Never underestimate Amazon.”
Barnard compared Amazon’s slow start in Australia with local ecommerce companies that have enjoyed success over the same period, namely Catch, which was recently acquired by Wesfarmers.
“The awareness of Amazon coming into market has helped consumer expectations grown and ecommerce grow, and Catch has just come in a really sophisticated and smart way to mop up some of that demand that Amazon potentially disappointed.”