Last week’s speculation regarding the impending arrival of US e-commerce giant Amazon to Australia, had the name of Justin Braitling, on everyone’s lips. Chief investment officer at Watermark Funds Management, Braitling, the only source named in Tony Boyd’s column in the Australian Financial Review, attributed his insider knowledge to a special briefing he received from the Amazon person directly responsible for the launch. He would not name his source and AFR asked for but did not receiv
e comment from Amazon before the story was published.
According to Braitling, Amazon will start selling general merchandise while simultaneously rolling out Prime, Prime Now and AmazonFresh across Australia in September 2017. Over the next year, it will set up distribution centres and performance centres in every state in the country to handle future orders, the fund manager said.
But it was Braitling’s paraphrasing of the anonymous Amazon executive that ensured the story would land a blow. “We spoke to the guy rolling out Amazon’s business here in Australia and in his words: ‘We are going to destroy the retail environment in Australia’,” Braitling told Boyd.
This is certainly a shocking statement, but that may be all it is. Two people who have knowledge of Amazon’s plans in the region separately told Inside Retail Weekly the AFR story is inconsistent with their understanding of the company’s strategy.
“Based on my knowledge of what Amazon is planning for Australia, Singapore and South East Asia, I just don’t see how it would be possible for Amazon to enter Australia and offer all of its services within six months,” an Amazon employee who wished to remain anonymous told Inside Retail Weekly.
The person went on say they could find no evidence that Amazon is leasing warehouses in every state in Australia and that they had never heard the term “performance centres” used at Amazon. Furthermore, the person was highly sceptical that an Amazon executive would talk about “destroying” the Australian retail environment, since Amazon CEO Jeff Bezos would never stand for that kind of language.
For Paul Greenberg, founder and director of the National Online Retailers Association (NORA), the notion that Amazon would implement its end-to-end e-commerce solution at one fell swoop was similarly improbable.
“If the question is whether a full end-to-end Amazon solution is coming to Australia, my answer is not any time soon,” he told Inside Retail Weekly, citing insight from Amazon leadership via a reliable third party.
“Our intel is that the marketplace model is still very vibrant and Amazon is looking to get more Aussie retailers signed up as merchants on its marketplace. Certainly, it is also looking to sell products into Australia, but it is already doing this on a large scale [through other storefronts].”
Plus, he added, Amazon’s US$5 billion investment in India has made the company’s global priorities clear. “We know that India is a major focus for Amazon and with all due respect, India would trump any Australian activity.”
It should also be noted that just days before the AFR story broke, TechCrunch published an article outlining Amazon’s plans to launch selected services – likely Prime and AmazonFresh – in Singapore in the first quarter of 2017.
The article has received little attention in the Australian press, but the subject and timing of the story raise further questions about Braitling’s assertions.
For instance, the Singapore plan to initially roll out just one or two services, rather than the complete Amazon solution, aligns closely with former Deloitte consultant Brittain Ladd’s prescient 2013 report on the online grocery market, A Beautiful Way to Save Woolworths.
In it he wrote, “Leveraging Prime and Prime Now could lay the foundation for which Amazon could build upon to expand their focus on groceries in Australia. Amazon could also utilize Prime and Prime Now throughout the region by expanding to Singapore and South East Asia.”
Ladd has since been recruited by Amazon and now leads the expansion of AmazonFresh globally, according to his LinkedIn profile.
While Amazon has not confirmed its plans to launch in Singapore, an earlier failed attempt to acquire Singapore grocery delivery startup Redmart, which Alibaba partner Lazada is now in talks to buy, indicates the company’s interest in the market.
Inside Retail Weekly attempted to contact Amazon in relation to its Aussie plans, however the e-commerce giant said it has “a long standing practice of not commenting on rumours and speculation.”
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