Over the last few months, Amazon has quietly been launching in Australia. Setting up a 'fulfilment' centre in Victoria, and having a token website with the standard bookshop front window. Meanwhile listed Aussie retailers like Harvey Norman, Myer, and JB HiFi have struggled with their share prices on the ASX as analysts brutally cut sales assumptions. Stock prices have been in a lull.
That's the million dollar question. Will it be Black Friday - the massive US sales event which has crept to our shores much like celebrations like Valentine's Day and Halloween? Apparently not.
Today's website search still shows the book shopfront. However a query for computers, shows over 80 products with nothing in the supplier detail.
Amazon's business model is to get retailers to pay $49.95+GST each month to sell, and then they clip a 6-15% margin of each product sold.
Not a bad little business! No wonder Amazon is one of the world's largest companies (valued at just over $1/2 Trillion USD) and included in the tech acronym FAANGs (Facebook, Amazon, Apple, Netflix, & Google). The FAANGs make up more than 40% of the tech index the NASDAQ.
With pockets that deep, Aussie retailers are concerned. But the reality is that only around $23b in sales is done online in Australia. Interestingly, this only represents around 7.3% of total retail sales. Amazon is likely to take 1/2 this market share (if we look at other countries like Canada by example), so there is still a place for Aussie bricks and mortar retailers.
