Nov 30, 2017 - Amazon's arrival in Australia brings with it opportunities for New Zealand firms writes Wellington consultant Hamish Conway in his company, Sell Global blog. Amazon is in 11 marketplaces around the world, with 123 fulfilment centres, and buying customers in 189 countries. The States is the biggest, with the UK able to fulfil to the other 26 European countries. They’re in Japan, and China but they’re having a tough time in China. AliBaba and the WeChat Group just dominate the Chinese market, with Amazon only having something like a 5% share of the market and consistently struggling there.
So, that’s all interesting, but obviously they are about to arrive in Australia. I was recently in Australia meeting with Fabio, from Amazon, who’s setting it up and running it, and they’re hiring now, looking towards a late November/December launch. Initially this is going to be a soft launch. They don’t want to over promise and under deliver around Christmas time.
Certainly a Q1 start is when it’s going to be happening. But, they have been building the catalogue over the next few months. They are getting their catalogue full, so when they do launch, this is a great opportunity for New Zealand companies that want to really stamp their mark on the Australian market, using Amazon as a channel.
Getting in early on Amazon, and getting on that page one should be the goal of all product selling companies in NZ. 86% of sales come from being on a page one search. Getting in first, and putting your stake in the ground and going, “right, I’m going to claim the peanut butter category on Amazon,” or whatever that category might be is going to be a huge advantage. Getting there and keeping it is far easier than coming in late and trying to claim that spot.
There are all sorts of categories that’ll just be open for business. According to a recent survey, one third of Australians who shop online, which is millions of people, they have said that they will switch to Amazon. They’ll definitely be looking at Amazon when it arrives. I suspect it would be more than that once it does launch, and they start to prove their worth.
Amazon is going to really change the landscape. Not only in Australia, but in New Zealand as well. They look at Australia and New Zealand as one. New Zealanders will be buying from Australia.
Amazon has its own products that they sell, largely the tech products, like Alexa and Kindle. They will also buy products from you, like wholesale. So, if they like the look of your product, they’ll go we’ll buy that. They’ll pay you as little as possible, and take for as long as they can to pay you. But enough people do that because they just think that that’s the right way to go. Actually Amazon doesn’t really look after it that well, but they do it. If you look at some products on Amazon, it’ll say “Ships and sold by Amazon” even though it’s a brand you might be aware of. Or, you can be a third party seller, of which any third party sellers can go and set up their products on Amazon.
The products that are currently in America don’t necessarily end up in Australia, so it’s going to be a whole lot of new products that are Australia and New Zealand centric. People from the States or from Asia will be sending products down to Australia into the Australian warehouses there for purchase. People probably still could shop in America for awhile, but once the inventory and catalogue builds up over time, as more suppliers or third party sellers put product in, that’s when it’s going to become bigger and bigger, and a really great opportunity for New Zealand and Australian businesses.
What is the impact from that? If you are a retailer, a brick and mortar retailer, it’s absolutely a problem. If you are a brand owner it’s good news. Being on Amazon gives you so much free traffic, and free brand awareness. For small companies breaking into Australia, it has previously been quite a tough gig, going through the traditional approach and maybe trying to get into supermarkets or through big pharmacy chains, or whatever it might be with what you’re selling. Being on Amazon, people are searching and if you’re there then they’re seeing your brand.
If you control your brand, and the distribution of it, and you’ve got your own e-Commerce store as well, Amazon is going to be a major support for that. If you’ve got products that you don’t control the distribution of then you’re in trouble. The bottom line is that it’s a huge opportunity for any business, whether they’re small and just getting going, or bigger businesses, who will need to be there, and be protecting their brand on that platform. If you aren’t selling your products on Amazon, other companies, other people, other distributors might start selling it there instead.
| Source: Sell Global || November 30, 2017 |||