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Amazon Australia Launch: Will It Succeed?

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The Story

The e-commerce platform is now operating in Australia, despite the country not being high on Amazon’s priority list. The company launched in India and Singapore first, suggesting Australia might be a tougher fit for Amazon’s business model. While Australian customers could previously purchase goods via the US, they will now be able to buy goods from Australian-based warehouses, reducing delivery time and costs.

Why It’s Important

It is no surprise Australia was low on Amazon’s list for new countries to enter. “What Amazon looks for is population density,” says Bloomberg Asia Technology Editor Reed Stevenson. A high population density allows the company to deliver items at a lower average cost. Australia, being a huge country with a population of only 24.5m, may prove to be a problematic environment for the company.

While online shopping makes between 8% and 13% of aggregate retail sales in the country, this is forecasted to increase to A$31.4bn by 2022, more than a 50% rise from A$20bn.

However, responses on Twitter to Amazon Australia has been negative.

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