Amazon’s First Year in Australia

Amazon’s Australia launch 12 months ago may not have lived up to the hype, but the company is on track to put the building blocks in place for years to come. “It’s been a big year and we’re only getting started,” said Amazon Australia’s country manager Rocco Braeuniger.

To begin with, Amazon managed to grow the assortment from 7.5 million products at launch to close to 100 million twelve months later. 20 million of which are from Amazon US available through the Global Store.

The biggest driver of the growing catalog is the marketplace, which has grown from 2,000 to 25,000 sellers in a year, according to our research. 40% of sellers, or 10,000 to be exact, are based in Australia, while the rest are international sellers, mostly from China. Marketplace Number of Sellers

On February 26th Amazon launched Fulfillment by Amazon (FBA) in Australia. Ten months later 27% of sellers have already committed to using FBA for most of their catalog.

FBA is as important in Australia as it is in other markets. Before the service was available in Australia the marketplace had the highest rate of negative reviews of all Amazon marketplaces. When Amazon launched in Australia many shoppers were not getting their products on time, or at all. By April most of those issues were fixed as more sellers started using FBA, or otherwise got familiar with selling on Amazon.

“Twelve months on from my first Amazon Australia order, still waiting 2-3 weeks for some items to be delivered - FBA is great, but it creates an annoying contrast with products not using the service.” Some shoppers are starting to notice the impact FBA has, and this is the reason why FBA usage and Prime membership growth go together. Percent of Sellers Using FBA

Prime membership program launched four months later on June 19th at AU$6.99 a month or AU$59 a year, and on day one it had more than 4 million products available. The growing inventory and Prime catalog has allowed Amazon to host the first Prime Day in July. According to our estimates, Prime Day was the biggest shopping day on Amazon Australia. Nonetheless, this Christmas shopping season is going to surpass that.

The marketplace, FBA, and Prime are starting to spin the flywheel. As a result, last month Amazon saw the most visitors yet at 16.3 million, according to SimilarWeb. That’s more than in December last year, and thus this December is going to be even bigger still. Before Amazon launched in Australia the website was attracting 4 to 5 million visitors a month, but has steadily grown since - has doubled website traffic so far this year. Total Visits

eBay is still the biggest marketplace in Australia with 76.4 million visitors last month, five times more than Amazon, and millions of sellers. Australia remains the only market where eBay is ahead of Amazon, but Amazon is steaming towards changing that in a few years time.

“Amazon’s arrival has really triggered that step change in audience behaviour. That entire competitive set was flat before Amazon’s arrival. I feel we are witnessing the most disruptive event in Australian retail since the advent of the internet because its impact is so far-reaching beyond its direct competitor set.”

Joe Lunn, Chief Strategy Officer, Mindshare

Amazon Australia is starting to gather momentum as it grows the marketplace, expands the catalog, and enables Prime shipping. They didn’t cause overnight disruption many were eager to see, but they started to play out the proven strategy used in other markets.

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Juozas Kaziukėnas

Founder of Marketplace Pulse, Juozas wears multiple hats in the management of Marketplace Pulse, including writing most of the articles. Based in New York City. Advisor to other startups and entrepreneurs. Occasional speaker at conferences.

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