Amazon enters Australia: A brief analysis of the Australian e-commerce environment and product category recommendations

August 24, 2017 20:10 (China Time)

Topic: Introduction to Australia’s e-commerce environment

Moderator: Leo H. Yang (Australia)

Location: WeChat group of "Knowing Everything" Wendao Study Group

Mode: Voice/text live broadcast

「Activity content record」

Discover Australia (Original Text) : Amazon, the e-commerce giant, has started to develop its business in Australia. Its CEO Jeff has made it clear that Amazon will use Old Wallgrove Road in Sydney, Australia as its first warehouse. The rent of this 96,000 square meter land alone cost about ￥50 million+, which is really rich.

Amazon's agent also said that they are still looking for more distribution centers in Australia, but just looking at the large number of express parcels, you can already feel the smell of money in the air. This warehouse has two main functions. One part is used as an "execution center" to handle business. The remaining 80,000 square meters is used as Amazon's automated warehouse to process orders.

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What is the e-commerce environment like in Australia?

1. Introduction to Australia

Australia, a huge isolated island in the southern hemisphere, is slightly smaller than China, but is a "developed country" with a population of only about 24 million. It is hereinafter referred to as "Australia". Australia is vast and rich in resources, with a relatively concentrated population in several core coastal cities, such as Sydney, Melbourne, Perth, etc. New immigrants also like to gather in these cities, and the central part is mostly desert.

Australia has British culture and American immigration strategy. The main immigration targets are skilled immigrants and investment immigrants. To immigrate to Australia, you must be either talented or wealthy. Australia focuses on sustainable development. Its light industrial products mainly rely on imports. Its main sources of income are mineral and agricultural and animal husbandry product exports, study abroad, tourism, and local service industries.

Australians are best described as free and unrestrained. In other words, most Australians are lazy. I am one of the "victims". I personally think that freedom is more important than wealth. Although Australians are lazy/careless and there are many fat people, they are more health-conscious and green. For example, Organic eggs are twice as expensive as caged eggs, or even more.

So how do these lazy people spend their money? - Offline and online.

2. Channel consumption habits of Macao

Every town has a shopping center, and families go shopping on weekends. It is common to see that all kinds of products are out of stock and the shelves are empty. The supermarkets where they buy are also extremely limited.

Mainstream offline shopping malls, larger suburbs will have Westfield Shopping Centre, and small town shopping centres will also have Coles or Woolworths; there are also supermarkets in some areas, such as ALDI, IGA, and chain dollar shops, which mainly sell cheap groceries.

3. What are the retail channels in Australia?

Australians have relatively simple consumption channels: mainly offline shopping centers, supplemented by online mainstream e-commerce channels. Online shopping channels are relatively rare, and even though the goods on eBay are uneven and the prices are not very attractive, it does not affect the enthusiasm of Australians for online shopping!

1. Supermarket: Coles and Woolworths are the two major supermarket giants.

2. Discount stores: K-Mart, Big-W, Target, which have a wide range of daily necessities and are affordable. They are subsidiaries of Coles and Woolworths.

3. Department stores: Myer and David Jones are mostly located in Westfield shopping centres, and their products are relatively high-end.

4. Convenience stores: 7-11 and other gas stations.

5. Similar to Gome and Suning’s specialty stores: This is the focus of our investigation. The reason is: the products in specialty stores are in high demand with high volume and popularity. I regard them as popular categories worthy of in-depth investigation and study. Amazon retail is here to compete with them for business.

6. Selling electrical and electronic products: JB Hi-FI, DickSmiths (bankrupt), Ted Camera, Harvey Norman, The Good Guys.

7. Wine shops: BWS, Dan Murphy's, Liquorland, Firstchoice.

8. Selling office supplies: officeworks.

9. Selling home furnishings: IKEA...

10. Auto parts: Ultra Tune, Supercheap.

11. Maternity and baby products: Toys R Us, Baby Bunting.

12. Hardware: Bunnings.

4. Opportunities for cross-border e-commerce sellers in Australia

The most important ones are eBay, independent vertical e-commerce platforms (suitable for brand owners, factories, or big sellers with awesome teams), and the upcoming Amazon Australia Retail.

eBay is the mainstream third-party e-commerce platform, followed by vertical e-commerce platforms such as Kogan and Best Buy; even supermarkets have independent shopping websites. This is a key point, why is there so little talk about it? Because there is only so much online consumption in Australia. You can use Australia's offline consumption habits to look forward to the future prospects of e-commerce in Australia.

On eBay, it is easier to place orders in Australia, the average order value is relatively reasonable, and Australians tend to buy from local.

Independent websites, successful Australian independent websites, are more professional and focus on a certain category. For those big sellers who have deeply cultivated products and supply chains, vertical e-commerce in Australia has a very good effect. Of course, the challenge is branding and traffic (SEO and SMM). Some successful independent website cases I know: computer peripherals, fitness, pets, clothing, adult products, etc.

If Amazon Retail enters the Australian market, the best references for us when looking for an entry point are retail specialty stores and independent websites with high traffic.

5. Recommend several Australian product categories

1. Outdoor and sport: swimming, cycling, just look at the Olympic gold medals. Australia's weather is really good, and villagers like camping and bikinis at the beach.

2. BBQ: State banquet. Former Australian Prime Minister Robert hosted a BBQ to warmly welcome Obama. Every household in Australia has BBQ equipment, and parks also provide free grills.

3. Car related: Almost everyone has a car, similar to the United States.

4. Home and garden: Bunning Warehouse is getting bigger and bigger, and many of its products are not cheap.
   Toys and games: a popular category that never changes.

5. Pet: Pets all have chips, and their treatment is special. All kinds of things are really not cheap.

6.