Why Amazon is a ‘fizzer’ in Australia
AMAZON is celebrating its third Christmas in this country, and despite warnings of how powerful and dominant it would be, it has barely made a dent so far.
It launched in December 2017, and as Christmas 2019 rolls around, it is rather hard to find anyone at all who considers themselves a loyal Amazon shopper.
The online retailer is working hard, growing its web traffic and boasting about Black Friday sales. It says the Australian launch was “the most successful of any Amazon launch”, although it doesn’t specify how that is measured, and so far Amazon doesn’t seem to have really cut through.
Of course, Amazon is trying to set up a big retail system, and that takes time. Just recently it announced it is opening a third fulfilment centre in Australia, in Perth.
Perth, of course, is the world’s most isolated major city, and that illustrates one of the big differences Amazon faces in Australia – we have a lot of open spaces to cover.
Enough time has passed now that I think we can fairly say the launch of Mr Bezos’ company has been kind of a fizzer. But to be fair, it’s not all Amazon’s fault.
Retail? You’d have to be insane to get into the retail business right now. Have you seen the figures? Australians have cut up their credit cards and hidden their wallets. According to the most recent retail figures, growth in retail spending has completely stopped. It is zero. Nada.
As a result, Australian retail businesses are on the very bones of their backsides, and some are starving to death.
Amazon is trying to grow a fragile business in an extremely harsh environment. If it is hard for established Aussie retail businesses that know the economy, it must be dreadfully challenging right now for a newcomer.
Amazon is a very fastgrowing company. But it has to face a simple fact. It is mostly growing in America.
Sales in North America are growing extremely fast and profits are positive. The rest of the world is a more sombre story.
Amazon might be struggling along, and it clearly hasn’t leapt into our hearts. But it also hasn’t given up. It is settling in for a long battle, and there’s good reason to be hopeful it doesn’t fail completely.
The responses of its competitors are useful for all of us. If Amazon keeps shaking up the quality of online retail in this country, that might ultimately be a good thing for Australian consumers.
Incentivology.