Amazon Finally Launches in Australia

And so far consumers seem underwhelmed

Author: Rahul Chadha

December 13, 2017

So far, Amazon has not had much of a presence in the Asia-Pacific region outside of India, where it has pledged some $5 billion in a knock-down, drag-out fight with homegrown platform Flipkart.

But that dynamic changed a bit earlier this month, when Amazon finally put long-simmering rumors to rest by quietly launching its ecommerce platform for physical goods in Australia.

(Amazon had already offered consumers in Australia the ability to purchase physical and digital copies of books, along with ereaders and tablets, and had rolled out its Prime Video streaming service in 2016.)

Leading up to its early-December launch, the mere mention of Amazon in Australia was enough to inspire dread in the hearts of local retailers. That’s partly because consumers had indicated they were ready and willing to shop on the ecommerce giant’s platform.

A May poll of internet users in the country from Pureprofile found 46% of adults said they planned to shop on Amazon when the service officially launched. That figure was even higher among younger age groups, coming in at 61% among 25- to 34-year-olds, for example.

It was widely expected that Amazon would use its much-vaunted mastery of logistics and deep pockets to undercut local competitors and quickly gain market share. But Amazon’s launch was met with a tepid initial response, according to several media reports.

Consumers and observers alike noted that the platform’s inventory was underwhelming upon its launch in Australia, and that prices for many goods were not substantially cheaper than those of competitors.

But it would be folly to count Amazon out in Australia this early. The firm has a well-documented strategy of playing a long game in retail that lets it operate on razor-thin margins while turning the screws on competitors.

However, it should be noted that Amazon has yet to launch in any other market in Asia-Pacific, aside from Singapore. Amazon rolled out its platform in the city-state in July of this year.

In much of Southeast Asia, the company will find itself playing catch-up to China-based firms like Alibaba, which owns a substantial stake in popular regional platform Lazada, as well as country-specific platforms like Indonesia’s Tokopedia.