Written by ecommerce consultants, AMZ Advisers.
The widely acclaimed success of Amazon is staggering. So, it may come as a surprise to you that some of its marketplaces are fairly new. A great example is Amazon Australia.
Back in 2017, Amazon faced enormous challenges while striving to position itself in Australia. Read on to find out how Amazon has been staying afloat – despite the setbacks – so you can decide whether you should expand your brand presence to this market.
How did Australians react to Amazon’s arrival?
Although the launch of Amazon in Australia was marketed as a gigantic disruptor that would immediately change the market forever, the truth is that Amazon had a rough start.
Despite its universal recognition and a heavy series of trials, during its first year, only six percent of the online shopper market was engaged with the platform, according to research performed by Power Retail.
In addition, this research found that:
- 68 per cent of Australian shoppers did not agree that Amazon was the cheapest option;
- One-third of the customers that visited the Amazon Australian marketplace left the site without doing any purchase;
- and that people who had purchased on Amazon Australia gave it a Net Promoter Score (NPS) of -7, whereas Amazon US has an NPS of 61.
The managing director of Power Retail, Grant Arnott, said the platform’s launch in Australia had mixed reactions:
“Many headlines in the build-up during 2017 suggested Amazon would destroy Australian retail overnight, sending shockwaves across the market. The idea that Amazon would drop out of the sky like an alien invasion force and obliterate our retail industry instantly was ludicrous, of course.”
Amazon Australia might have had a slow start, but by 2018, the platform was offering over 100,000 products across 29 different categories.
Australia’s e-commerce market was expected to reach USD$12 billion in sales in the past years, and by 2022 the prognostic is that it will reach USD$25.2 billion, making it a fast-growing market.
Additional perks of exploring Amazon Australia
If you already live in Australia, this is a great time to start moving your products through Amazon. Those sellers with an Australian address can get a 10 per cent tax waiver on items sold on the platform. If you do not have an Australian address, this may be the perfect time to consider a bigger horizon for your company and build-up a reputation as a seller with the lower amounts of competition.
Despite its rocky start, Amazon gained acceptance with the introduction of Amazon Prime in 2018, giving users countless discounts, expedited shipping on select products, and Prime Video subscription as well as Amazon Music (in some countries).
Another big milestone in securing the market was the introduction of Fulfillment by Amazon – a program that allows sellers, with the right metrics, to take a load off their processes by having Amazon handle shipping and delivery process for them.
Amazon will keep products in one of their warehouses and ship them as they get purchased to ensure your products arrive on time and will be handled and stored with care and professionalism.
Amazon Australia: the social impact
There is a big concern when it comes to Amazon entering new markets.
People wonder if the retail giant will have a negative impact on local jobs, especially because Amazon tends to go for automation rather than hiring long-term staff members for their facilities.
Nevertheless, the impact on the markets where Amazon has launched globally has never been as impacted as the US and even the Robotics Fulfillment Center has created over 1,500 jobs for people.
The opportunities it provides for retailers may generate more indirect jobs. As Amazon continues to grow it will create a domino effect that will undoubtedly benefit the economy in Australia and will help all retailers grow.
How do I get started?
Amazon has stated that all you need to do is sign up as a seller on Amazon Australia, take into account that, like in many countries, Aussie users who try to access international versions of the website will be redirected.
Even if they were to bypass the redirect with a VPN most of the products listed on other countries will not ship to an Australian address. So, to reach this market, you will need to create your account within the AU platform – even if you already have a US account.
Of course, you will need to pay a fee of $49.95 to list your products as well as a 6 to 15 percent fee on all sales, depending on the type of product.
One of the biggest strengths you can have right now, when embarking into the Australian e-commerce market, is good customer support.
Amazon has built an empire on customer experience and customer support plays a big role. Since the platform is relatively new for Australia, many retailers have had a learning curve when adapting to Amazons customer support guidelines; and apparently, it shows when looking at certain metrics.
Also, it is evident that many shoppers don’t leave reviews, which means that sellers were not building a relationship with their customers.
Beating counterfeiters with Amazon Transparency
This year, Amazon announced the launch of Amazon Transparency for Australia offering a serialisation for original brands and products to be distinguished.
Brands can ship their products with a unique code that allows Amazon to inspect every item in the program and prevent counterfeits to ever reach a shopper. The customer can also scan the code through an app to verify its authenticity–no matter who they bought it from.
It’s estimated that this program has prevented over 500k suspected attempts to ship counterfeit items across the registered brands.
If you take a look at how much e-commerce has grown in this country, and how many opportunities Amazon Australia is offering, it becomes clearer that expanding your scope is a risk worth taking to expand your reach into a growing market with forgiving competition.
AMZ Advisers is a full-service ecommerce consultancy focused on creating growth opportunities for brands, manufacturers, and private labels across the US, Europe, Canada, and Asia.