Amazon.com Inc (NASDAQ:AMZN) has finally launched in Australia but many consumers Down Under have reacted with disappointment on social media about the prices of products.
The e-commerce giant said it is offering millions of products across more than 20 categories and one-day delivery in some areas.
But some consumers took to Twitter after the launch of the website to complain that many of the products listed could be found cheaper elsewhere.
For instance, Apple's iPhone 7 Plus was being listed at a 15% markup compared to the Apple store while an Oral B toothbrush was 45% more expensive than on eBay.
I just looked at Amazon, just opened in Australia. Not that cheap. I've seen better deals.
— Fletcher Thomas (@SaintKrishna) 5 December 2017
#amazonaustralia Massive fail. Spent 20 minutes navigating the shocking website to find 11 types of golf shoes. All dump & run rubbish. Amazon US had 40 options starting at $40. Australia $80 to $300. Will be Broke within 12 months.
— MSL2035 (@MSL2035) 5 December 2017
Amazon Australia is so underwhelming. Big brand brush pens 2-3x more expensive, some books are just a tad over indie bookstore prices, photo printers more expensive than JB. I mean, it could just be the items I'm looking up, but from this it seems pretty crap
— Nyssa Harkness (@VintageZombie) 4 December 2017
Just looked at Amazon Australia. Disappointed almost EVERYTHING is cheaper to buy at kmart; Woolies etc nothing is cheap lol Yay for high ASF prices @amazon
— Davo (@davobaird) 4 December 2017
Thanks for replying so quickly. I’ve lived in the UK and shopped at Amazon UK and USA and know how good it can be. Shoppers in Australia have been short changed for decades and we want a real alternative, so a proper launch not a piecemeal approach would have been preferable
— Marco Hall (@marc0hall) 5 December 2017
Hurdles for Amazon Australia
Australia presents a challenge for Amazon as the cost of deliveries are higher given the sheer size of the country, low population density and large distance between homes. While Australia is almost as big as the US, the population is just 24 million people and major populations can be sometimes 4,000km apart.
However, it still presents an opportunity since nine out of 10 Australian households are already online. Internet shopping is expected to be worth A$31.4bn (£17.9bn) by 2022, up from about A$20bn now, according to researcher IBISWorld.
“They are offering pretty good deals and their launch is really aggressive, but it is just not meeting what Australian consumers expect at the moment,” said Kim Do, senior analyst at IBISWorld, citing limited shipping capabilities. “In the next year, they are still going to rapidly gain market share as they improve their product categories, they improve their shipping time and they improve their relationship with manufacturers and suppliers.”
Boost to retail sector
Australian Retail Association executive director Russell Zimmerman said Amazon's Marketplace could provide a boost to the Australian sector as the platform will offer "millions" of products from well-known Australian brands.
"The majority of Australian retailers view Amazon's platform as a supplementary channel to their current retail offering," he said.
More than half of products shipped from China
However, many of the products listed on the new website are being shipped directly from China, rather than from warehouses and retailers in Australia, according to data collected by Marketplace Pulse and reported by Australian news website The New Daily.
On the first day of Amazon Australia’s launch, 52% of shippings came out of China.
“[China’s share] is roughly one-third elsewhere. But given Australia’s proximity to China, and smaller set of sellers, I can see why it is so high in Australia,” said Joe Kaziukėnas, founder and chief executive of Marketplace Pulse, which tracks all 13 of Amazon’s marketplaces.
"And yet, that’s extra pressure for local retailers.
"The share is increasing worldwide as Chinese manufacturers and retailers get accustomed to sell abroad."