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Retailers verdict: Amazon not a threat in Australia

Retailers verdict: Amazon not a threat in Australia



A year after Amazon's launch in Australia, two thirds of businesses say they haven't been affected by its arrival and are unconcerned about its impact on Christmas trading.

A PayPal study of 200 small and medium Australian businesses about their Christmas concerns found worries about online shopping rivals dropped from third position last year to sixth spot this year.

PayPal Australia spokesman Peter Cowan said typical Christmas concerns such as cash flow pressures and shipping goods in time for Christmas Day were more pressing issues for shop owners. 

“This time last year there was a lot of talk about Amazon coming to market in Australia,” Cowan told News Corp.

“Now they’ve had a year of trading with Amazon, small businesses have reduced that concern.”

The survey also found that, on average, businesses expect Christmas sales to produce 43% of their annual revenue.

One in 10 are relying on the Christmas season to contribute up to 80% of sales for the entire year.

Retail experts warn against complacency

Gartner global retail principal research analyst Thomas O’Connor added that “fears Amazon would arrive and dominate very quickly” had proven false over the last 12 months.

But he noted the company's history of ramping up its offerings over time should not be taken lightly.

“Amazon is going to be continually applying pressure to the market,” he said. "Just because you’re not feeling the pressure now doesn’t mean it isn’t coming.

“You have to be looking at what these giants are trying to achieve and look at how they’ve succeeded globally because it’s a story that will likely replay itself in Australia.”

Last month, Deloitte's 2018 Retailers' Christmas Survey found that 83% of Australian retailers believe Amazon will not have any impact on their Christmas trading performance.
David White, national leader of Deloitte's retail, wholesale and distribution group, was cautious about the results.

"Amazon remains at least one very large elephant in the room," he told ABC News

"While we've yet to see the full force of Amazon locally, its prime offering isn't as compelling, yet, as in the US and UK in terms of driving volume of impulse buying and loyalty to the platform."

White said Amazon Australia was continuing to invest heavily in its local infrastructure and staff.

"Underestimate Amazon at your peril," he said. "Amazon has set the cat among the pigeons, bringing scale and capabilities that have the potential to strike in those areas in which Australian retailers are most vulnerable."

 



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