ONE-HOUR DELIVERY

At home, Amazon has a market value of $475 billion and dominates e-commerce. North American revenue accounted for almost two-thirds of the company’s $136 billion in sales last year, when net income quadrupled to $2.4 billion. Through its $99-a-year Amazon Prime subscription, the company is cutting delivery times, offering batteries, cleaning products or toothpaste in as little as an hour in dozens of cities. The goal: combine the convenience of online shopping with the instant gratification of a quick trip to the store.

It’s tougher to replicate domestic success overseas. While sales at Amazon’s international business have soared, the division has posted consecutive pretax losses since 2012 totaling $2.2 billion as the company invests in new markets, according to Amazon’s annual reports.

COSTLY BUSINESS

“It is costly to establish, develop, and maintain international operations and websites,” Amazon says in its latest report. “Our international operations may not be profitable on a sustained basis.”

A Sydney-based representative for Amazon declined to comment on the specific challenges it will face in Australia or say when it will launch a retail offering. Amazon has sold e-books in Australia since 2013.

With nine out of 10 Australian households already online, the growth of Internet retail sales will almost halve in the nation in the next five years, according to IBISWorld Pty. Internet shopping will be worth A$28 billion ($21 billion) by 2022, up from about A$18 billion now, the Melbourne-based researcher said in a November report, before Amazon confirmed its Australian plans.

Despite the immediate challenges, Australia is a key piece of Amazon’s longterm goal of creating a global distribution network that connects buyers and sellers from many countries. That warrants big initial investments without near-term returns.

“Amazon’s ultimate ambition is to have the presence it has in the US everywhere in the world,” said James Wang, an internet analyst at New Yorkbased ARK Invest. “They’re operating on a very long timeline and Australia is another square on the chess board.”

With operations in India and Australia, Amazon will have key shipping hubs