Three in four Australians ready for Amazon

Online shopping

Three in four Australian adults are interested in Amazon Australia and 56 per cent are likely to purchase from its Australian site, according to a survey carried out by Nielsen in January 2017.

Almost half (45 per cent) of respondents stated that they would subscribe to Amazon’s Prime service for deals, discounts and fast delivery.

Two thirds of respondents noted that they were likely to use Amazon to purchase electronic goods, while three fifths said they will likely buy books or clothes through the website.

The survey found that Australians have little interest in buying their groceries from Amazon, just nine per cent of respondents said that they would likely buy fresh vegetables through the site and seven per cent said they would use it to purchase fresh meat.

Craig Woolford, Citigroup’s head of research, told the Australian Financial Review (AFR) that Australia represents a very promising prospect for Amazon, and he believes Amazon could capture sales of at least $4 billion within five years of rolling out its services. “Australia’s appeal for Amazon becomes clearer when you adjust retail sales levels for population. Australians spent $12,200 per person on retail goods last year, third only to the US ($15,700 per person) and Japan ($12,300 per person). These are both markets in which Amazon has a local presence,” he said.

JB Hi-Fi, Harvey Norman, specialty retailers such as Super Retail Group and Premier Investments, department stores including Myer, Target, and BIG W and footwear retailers such as RCG have the most to fear from Amazon, according to Citigroup. “Amazon’s impact on (Australian) retailers would be diverse, given the magnitude of its product range. We expect the greatest impact to be felt by electronics retailers given Amazon’s product range and the branded nature of these products,” Woolford recently reported. “We estimate 44 per cent of its product sales would be electronics [and] the next largest category is likely to be physical and electronic media including books.”

“When Amazon comes to Australia, whether it’s this year or not, it will take a year or two to have that knock-on effect,” said James Stewart, Ferrier Hodgson retail partner. He added that he doesn’t expect Amazon to establish a full physical presence in Australia for another two years, given the time requirement to build fulfilment and sorting centres and to build relationships with Australian brands.