Amazon & Australia: The Thunder Down Under

Geographically separated from most of the world, Australia has long retained a sense of independence and individuality. However, the rapid spread technology and ubiquity of readily-available information has made the world a much smaller place. On the Internet, Australia is one small click away from Seattle.

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At 250,000 square feet, Amazon’s first Australian distribution center is located just one hour south of Melbourne.

To borrow from Damien Cave’s article in this Sunday’s New York Times,

Amazon’s arrival in Australia is a stress test not just for individual retail categories but also for Australia’s way of life.

“Our culture is, and all cultures are, being swamped by outside influences,” said Mark Rubbo, co-owner of “Reading,” Melbourne’s leading independent bookstore. “We’re fighting to defend our voice.”

According to the Sydney Morning Herald, the time has come for Australian merchants to batten down the hatches:

Amazon has traditionally taken between two and five years to gain traction in a new country, so experts say now is the time for the Australian retail sector, landlords and tenants, to start getting into gear and “Amazon-proofing” the malls.

Good luck with that…

Similarly vociferous Aussies claimed that Costco did not have a chance in their highly personalized market. Yet, in 2016, Australian consumers spent over $1.5 billion at Costco and new locations are opening this year.

An Amazon victory is not a sure thing.

Starbucks tried, and has thus far failed, to penetrate the Australian market. However, this effort is far from over. Starbucks tested, learned some lessons, and is relaunching with vigor.

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Daniel Parfitt’s crashed $80,000 drone after an attack by a wedge-tailed eagle. PHOTO: TOM LAW – WSJ

Further, technology does not always defeat an indigenous population. As reported in this weekend’s Wall Street Journal, Australian wedge-tailed eagles are using their “crack aerial skills” to attack hi-tech, and expensive, drones and rip them from the sky.

Ultimately, the Australian consumer will vote: convenience, assortment & price vs. long-standing local merchant relationships. It’s a new era with new options.

(c) David J. Katz, New York City – 2018

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