Amazon pumps $1.6bn into Oz

Amazon is spending $1.6bn on five new Australian operation sites – including warehouses and delivery centres – as a new report reveals households are saving thousands of dollars shopping online.

The new centres will be completed by the end of next year and employ 4500 people once fully operational, 2000 of them at a robotics fulfilment centre in Melbourne that will be about the size of 11 MCGs.

It has invested $15bn in its Australian operations since launching its local online store and marketplace in late 2017. It has been focused on speeding up deliveries for its customers in past months. This includes expanding its free next-day deliveries to Brisbane and key regional cities for Prime customers and recruiting contractors as part of its Delivery Service Partner program.

“Despite the fact that we know we have a long way to go, we actually feel pretty good about where we are now,” Amazon country manager Janet Menzies said. “We spent the last six years building the critical infrastructure that allows us to deliver on the customer mission.”

But the investment has come amid a cost-of-living crisis and Ms Menzies said Amazon customers were “doing it tough”.

“Our focus very much is on delivering broad selection, on having that fast free delivery. And then finally having competitive pricing and that’s through everyday pricing, but it’s also through (sale) events,” she said.

Ms Menzies said Australian households had saved almost $3500 on average since 2019 via online shopping, citing a study that Amazon commissioned from Mandala.

The report states that without competition from online retailers, inflation would have been higher.

“We find that in the absence of competitive pressure from online channels, inflation would have peaked at 8.9 per cent in December 2022, 0.7 per cent points higher than the actual peak of 8.2 per cent,” the report says, adding that the savings were equivalent to receiving three weeks’ of groceries free each year since 2019.