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Insolvency rates rise as retailers feel Amazon impact

Oroton collapsed in 2017.

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Competition from global online giants like Amazon and Alibaba is driving an increase in the number of local retailers shutting up shop, according to new research.

While the overall number of Australian companies entering external administration is in decline, data from global information company Equifax reveals the retail industry is heading in the opposite direction.

Along with the accommodation and food services and education and training sectors, there has been an increase in retailers entering administration over the past three years.

Retailers including accessories label Oroton, Sambag and fashion brands David Lawrence and Marcs have all fallen on hard times recently, and Equifax commercial and property products general manager Neil Shilbury said new players entering the market were putting pressure on the local industry.

“The industries seeing an increase in insolvency are, in many cases, also those facing disruption from new market entrants,” he said.

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“Traditional retailers are being threatened by the consumer shift to online shopping and the entrance of global giants, such as Amazon and Alibaba, to the local market.”

The accommodation and food services industry has been grappling with the impact of peer-to-peer sites like Airbnb and tech-first delivery services such as UberEats and Deliveroo.

“These kinds of disruptors put a lot of pressure on the industry, and particularly on small and independent businesses.”

 

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