Why is Amazon growing more slowly in Australia than elsewhere?
1. Amazon has trouble beating local retailers on price
Amazon has struggled to beat Australian electronics giants JB Hi-Fi and Rebel (owned by Australia's largest retailer Super Retail Group) on price, with the internet giant's limited local stock of product range forcing it to rely on third-party deliveries from the United States.
Morgan Stanley compared prices of 16 products shared by Rebel and Amazon and found that the latter's prices were 14% higher on average. Of the 12 products that JB Hi-Fi and Amazon have in common, Amazon is cheaper on three, while JB Hi-Fi is cheaper on five, with the rest being the same price.
However, if the product is shipped from Amazon's local warehouse in Australia (called a first-party product), there will be some differences in its price. According to Morgan Stanley's tracking survey, when it comes to sports products, Amazon's products shipped from local warehouses are 13% cheaper than Rebel's products and 4% cheaper than those sold by JB Hi-Fi. This shows that the products shipped by Amazon from local warehouses are very competitive and often cheaper than those of local retailers.
2. Retailers boycott Amazon
In addition to the lack of warehousing space in Australia, Kierath also pointed out that Australian retailers may be reluctant to sell through the Amazon platform.
For example, in the U.S. consumer video game market, the top three retailers account for 36% of the market share. In Australia, JB Hi-Fi and Harvey Norman have as much as 53% share. In sporting goods, the top three retailers in the US have a combined 20% market share, while Rebel alone has a 21% share in Australia.
What are the requirements for entering the Australian site?
If you want to start selling on Amazon Australia, you first need to register a seller account on Amazon Services Australia. This step requires you to provide relevant business information, a tax ID or social security number, an email address (different from the address you use on other seller accounts), an international credit card, and a phone number.
After submitting your information, a representative from Amazon Australia will contact you and approve your account. After that, you can start listing under the existing 29 categories.
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