Amazon Australia to be 30 percent cheaper than local market; offers food & FBA

Amazon Australia to be 30 percent cheaper than local market; offers food & FBA

E commerce giant Amazon is setting up to take Australia by storm. Speaking to The Australian Financial Review (AFR), Watermark Funds Management chief investment officer Justin Braitling said Amazon plans to set foot on Australian soil by September 2017 with prices 30 per cent cheaper than local stores. He said that the prices in Australia were very high and countering them would be Amazon’s prime motto for Australia. “Your margin is our opportunity,” would be Amazon’s axiom for Australia.

The AFR quoted Braitling saying that he spoke with the person responsible for Amazon Australia and was told: ‘We are going to destroy the retail environment in Australia.’” Amazon plans to collect pricepoints on the merchandise before finalizing prices. The Australian launch was pushed back six months so that the company could include its fresh food service.

“It makes a lot of good points, and certainly Amazon’s presence will definitely have a major economic impact on the Australian retail landscape, but in terms of Amazon being an online retailer you need a little bit of perspective,” Daniel Mueller, senior equities analyst with Forager Funds Management was quoted saying by news.com.au.

“Even if they get half of the Australian market, you’re still looking at 4 to 5 per cent of total retail sales,” he said. “And getting into fresh, it’s unclear how the model is going to work. But it does raise some good points. Australian retail margins are quite high, our supermarket retail margins are among the highest in the world.”

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