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Amazon Business Launches in Australia: Anticipating Changes in the Retail Landscape
Online retail giant Amazon has officially introduced Amazon Business in Australia, further solidifying its significant presence in the nation’s retail sector. The new B2B platform aims to provide Australian businesses with immediate cost savings and access to millions of products, streamlining their purchasing processes.
Originally launched a decade ago in the United States, Amazon Business has expanded its footprint to 11 countries, accumulating over eight million customers globally. Lena Zak, Amazon Business Australia’s country manager, highlighted a gap in the Australian market, suggesting that the service addresses unmet needs among local businesses.
“I really don’t think that anybody else can offer what we offer. We have millions of products on Amazon that really aren’t available anywhere else,” Zak noted.
Features and Benefits
The Amazon Business platform promises not only a vast selection of products but also the fast delivery services familiar to existing Amazon customers. Unique features including business-only pricing and quantity discounts are tailored specifically for commercial purchases. Zak emphasised the convenience for business customers who traditionally buy office supplies, electronics, and furniture from multiple vendors.
Some potential customers include tradespeople seeking tools, daycare facilities needing stationery, and various businesses looking to stock pantry items and cleaning supplies—all streamlined through a single platform.
Recent research by YouGov, commissioned by Amazon Australia, revealed that operational costs have surged for 92% of small and medium enterprises in Australia over the past three years. With 79% of firms concerned about rising costs, the platform aims to alleviate some of these financial pressures by offering competitive pricing and rapid delivery options.
“We absolutely believe that as operating costs keep rising, Amazon Business can help take some of that pressure off by offering real savings on everyday goods and supplies,” Zak commented.
Competitive Pricing
The pricing strategy of Amazon Business showcases significant savings compared to traditional retailers. For instance, a HPM Standard 4 Outlet Powerboard is priced at $5.25 on Amazon Business, while Officeworks sells it for $7. Similarly, DeLonghi signature blend coffee beans are available for $26.64 on Amazon Business, undercutting prices at The Good Guys and JB Hi-Fi.
Amazon’s Growth in Australia
Since its launch of a local retail platform in 2017, Amazon has established a prominent position within Australia’s e-commerce market, investing about $15 billion in local operations since 2011. In the last financial year, Amazon reported Australian revenues of $7.7 billion, marking a 20% increase, with its e-commerce sector contributing $3.8 billion—a 23% rise year-on-year. Furthermore, its Prime subscription service, offering benefits like same-day delivery, saw revenues grow by 39% to $480.4 million.
Goldman Sachs has ranked Amazon as the second-largest online retailer in Australia by sales, trailing only Woolworths and outpacing competitors like Coles, Officeworks, and JB Hi-Fi. Notably, major Australian supermarket chains regard Amazon as a formidable competitor. Woolworths executive Amanda Bardwell acknowledged Amazon’s influence in covering around 40% of its grocery product range. Coles CEO Leah Weckert also expressed concern about the potential disruption Amazon could cause to their traditional business model.
Customer Base Expansion
Recent Roy Morgan research indicated that Amazon Australia has attracted a customer base of 7.9 million, which includes an increase of 1.1 million new customers within the past year. With the launch of Amazon Business, the company aims to continue this upward trajectory while providing essential business solutions and maintaining its competitive edge.
Conclusion
Amazon’s entry into the Australian B2B market with Amazon Business is set to reshape the shopping experience for local enterprises. By offering extensive product selections, competitive pricing, and robust delivery services, Amazon Business seeks to bridge the gap in the market and provide significant cost savings to businesses navigating rising operational expenses. As it continues to grow, Amazon’s influence in Australia’s retail landscape will likely intensify, challenging traditional business models and reshaping consumer purchasing habits.
