Amazon Australian launch could devastate local fashion retail

By

Sandra Halliday

Published
Nov 7, 2016

The Australian fashion retail sector is bracing itself for a major assault next September as global online giant Amazon prepares to launch a full offer in the country in southern hemisphere Spring 2017.

Amazon, which has has invested heavily in its fashion offer in recent years and is the largest online fashion retailer in its domestic market, the US, is currently available in Australia only on a limited basis and has no local distribution centres.

The official launch will see it selling a wider range of goods than at present, including clothing and accessories, at prices estimated to be up to 30% lower than those offered by local stores.

Analyst Justin Braitling of Watermark Funds Management said a consultant working with Amazon told the firm that Amazon sees major opportunity in Australia given its relatively high prices and higher-than-average profit margins.

Ross said the consultant said Amazon is already looking at sites for distribution centres and warehouses in major cities and could go live as early as the spring, although the launch may not happen until early 2018. It will also carry out a major Australian price audit before it launches with plans to undercut rivals by almost a third in some cases.

The head of Australian retail giant Wesfarmers had warned earlier this year that Australian stores will need to urgently review their pricing and that many are underestimating just how much of the A$300bn (US$231.68bn) market Amazon will be able to take.

Until now, Amazon’s Australian growth has been curtailed by high shipping fees and the aforementioned lack of availability of certain products there.

The e-tail giant currently has around a 15% share of the US retail market and a 50% share of that country’s online retail market.