Amazon Australia was released today and it has... Implications!

The situation

Today is a truly important day in the lives of Australian consumers and consumerism as a religion if you count it as one, which we at Matter Solutions do so.

Amazon finally dropped its Australian website today.

But the crazy thing is, they did it with seemingly no warning.

If you know of any other major company operating in Australia, you would know that they notify just about everyone (that can bear to listen) whether they were becoming publicly listed on the ASX, or the toilet in cubicle 4 on level 8 was clogged from Jeremy’s wifes dicey ‘Spanish’ paella.

It is exceptionally odd that Amazon just decided to drop on in, like they have, without sounding a loud and overbearing corporate alarm.

But that’s Amazon I guess. They were founded by Jeff Bezos - a man who seemingly believes that doors are also desks and who looks like a human Squidward.
But why did they give no warning at all?

Amazon was tipped to release the Australian version of the site to coincide with the consumer holiday of ‘Black Friday’ on Thursday the 23rd of November. This was due to an email being sent out by Amazon to a seller, asking them to prepare for the launch of the site with an “internal testing phase”. But the day came and went without Amazon Australia being released.

So everyone gave it the shoulder shrug and moved on without knowing when Amazon would launch the site. And it didn’t appear that the anticipation was palpable. The amount of publicity and press for the site's launch would’ve been out-enthused by the release of Amazon Prime.

They effectively released their billion dollar product into the Australian marketplace with nearly zero publicity. And not even an amount of publicity that is relative to the size of the company, but just not much at all.

And they couldn’t care less.

Amazon has a stacked hand. In fact, they own the damn deck. Amazon is breaching into a marketplace where their major competitors like Myer and Harvey Norman, still have checkouts scattered throughout the store, taking up an unnecessary amount of space.

Hang on what am I even saying.

They are breaching a market where their major competitors still have a PHYSICAL STORE.

The days of a middle-aged, marginally overweight bloke named Ron telling me which sound system I will like best are over. And that is why Amazon couldn’t care less about wasting a whole lot of time and money into a ‘Kevin Hart starring in his next cheesy film’ sized press junket.

But what about the site itself?

Well if you go onto Twitter you’ll quickly find many, many memes about the high prices of the Amazon products. Many are suggesting that there isn’t much point in switching from the American site if that's the site you are currently using to purchase your goodies. But I see these prices as an initial test by Amazon to see how consumers react. I wholeheartedly believe that prices drop as Amazon become more established in the Australian Marketplace.

The site currently offers a fairly limited range of products compared to other online retailers like Kogan. The range of products includes clothing, e-readers and electronics, toy, beauty products, sport, home improvement, kitchen and office supplies and video games, movies, TV, and music. The selection of products will expand based on consumer demand and will start to look a lot more like the American Amazon that is so wildly popular.

Who’s competing with Amazon then?

Amazon will face the most resistance from other retailers that have an internet presence.

For the moment.

The lesson that major Australian retailers are about to learn is that innovation, infrastructure, and really deep pockets can only be stifled by the Australian Government up to a point. GST will only keep Amazon at bay for so long, so the other majors HAVE to start innovating if they want to keep their place. Amazon has time, money and a sense of consumer excitement that the other major retailers are lacking.

We have already seen examples of this with the introduction of ALDI into Australia. We are seeing the same undercutting of price, without sacrificing quality from ALDI, who are gaining ground on the older and established grocery brands, recently surpassing the IGA in terms of market share. This could get even worse with Amazon reportedly ready to stick their finger in yet another Australian pie through Amazon Fresh.

So who wins in all of this?

Well if you are an Australian consumer who doesn’t have any direct connection with major Australian retailers than you’ve won! It will most likely work out for you either way. If Amazon plays the long game and just decides to outwardly decimate the competition with better prices (if they drop) and the Australian retailers respond in kind, we can enjoy the spoils of a mass price war!

However, out of this, we could end up seeing Amazon push Australian retailers out of the marketplace and take a stranglehold on the Australian consumer product market and we would subsequently be at the mercy of the almighty J.Bezos.

All in all, the release of Amazon Australia has been a somewhat diluted event, with the most exciting stuff to happen in the future.