Amazon stripping customers from rivals

Online retail giant Amazon has punched through the $3bn sales barrier in Australia, driven by a lift in demand for its retail and media services in 2023.

Amazon is now believed to account for 10 per cent of all online shopping in Australia.

Its sales here have almost doubled in the past few years as it takes on established players, such as supermarket giants Woolworths and Coles, department stores Kmart and Big W as well as eBay and local online stores Kogan.com and Catch.

Amazon is easily outpacing the growth of the local online retail sector and is pinching market share from both local and international retailers.

It is believed Amazon now has just over 4.1m subscribers to its Amazon Prime service, easily eclipsing the subscription programs run by Woolworths and Wesfarmers, which each have only around 400,000 to 600,000 members.

The latest accounts for Amazon Commercial Services, the global corporation’s key business arm in Australia, underlines its growing market power, with its total sales for the 2023 calendar year hitting $3.1bn, up from $2.63bn in 2022 and $1.75bn in 2021.

The accounts show its own online store grew revenue by 21 per cent in calendar 2023, while third-party seller revenue increased by 79 per cent. Its subscription services such as its Amazon Prime, which also offers TV and movie streaming, reaped sales of $346.2m in 2023, up from $246.21m in 2022.

MST Marquee analyst Craig Woolford said: “Its market share gains have been mostly at the expense of other online retailers.”