Lyla Lindsey
Amazon Australia has been rapidly growing since its launch in 2017, and is now one of the country's leading online marketplaces. Amazon's sales revenue in Australia hit A$1.75 billion in 2021, and is estimated to surpass $2 billion in 2022. Amazon's success in Australia can be attributed to its everything store status, streaming offering through Amazon Prime, and competitive advantage in supply chain presence and technology. The company's momentum has made it an emerging threat to other local brands, and it is projected to become more integrated into Australians' everyday lives.
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What You'll Learn
Amazon Australia's revenue growth
Amazon Australia has experienced rapid revenue growth since its launch in 2017. Within a month of its launch, Amazon Australia boasted over 5,000 third-party sellers, with an average of 55 new sellers joining each day.
In 2018, Amazon Australia's revenue was $292.3 million, a 1500% increase from the previous year. By 2020, revenue had more than doubled to reach A$1.12 billion, and in 2021, Amazon's sales revenue hit A$1.75 billion. This growth was attributed to its "everything store" status and the popularity of Amazon Prime, with Prime memberships contributing $155 million in revenue in 2021.
Amazon Australia is projected to continue its strong performance, with estimates placing its sales at around A$10 billion in 2026, accounting for approximately 20% of all internet sales in Australia. The electronics and appliances category is expected to be a significant contributor, with sales in this segment alone estimated to reach A$3.5 billion in 2026.
Amazon's growing logistics capabilities, job creation, and support for local communities have also contributed to its success in Australia. Despite competition from eBay, Amazon has become one of the leading online marketplaces in the country, showcasing its ability to adapt and thrive in the Australian market.
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Amazon Prime's impact
Amazon Prime has had a significant impact on Amazon's business in Australia. With 200 million members worldwide, Amazon's subscription service has been a huge success for the company. Amazon Prime memberships in Australia accounted for $155 million in 2021, up from $35.4 million in 2019, making it a fast-growing arm of the local Amazon enterprise.
Amazon Prime was launched in Australia in 2018, offering free one-day delivery on a large number of items, as well as Prime Video, Prime Gaming, Prime Reading, and more. In 2024, Amazon Prime added free same-day delivery in select postcodes in Sydney and Melbourne, as well as free shipping for international orders over $49. Amazon Prime Video is now the cheapest streaming service in Australia, costing A$9.99 a month, compared to rivals Netflix, Stan, and Binge.
The introduction of Amazon Prime has helped Amazon become one of the leading online marketplaces in Australia, overtaking rivals such as Catch and Kogan. Amazon's sales revenue in Australia hit A$1.75 billion in 2021, with Amazon Prime memberships playing a significant role in this growth. Amazon Australia's revenue more than doubled between 2019 and 2020, reaching A$1.12 billion.
The success of Amazon Prime in Australia has been attributed to its wide range of benefits, including free delivery, streaming services, gaming, reading, and exclusive deals. Amazon Prime Day, a day of exclusive deals for subscribers, has also been a significant driver of Amazon Prime memberships.
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Amazon's competition in Australia
Amazon's expansion into Australia has brought about a significant shift in the country's retail landscape, with the company becoming a formidable competitor to local retailers. Amazon's rapid growth in Australia has been described as a "major shift in consumer behavior," posing a challenge to traditional retail giants. The company's focus on enhancing its logistics network for faster delivery times has been a key factor in its success.
According to a report by Goldman Sachs, Amazon has become the second-largest online retailer in Australia. This growth is further emphasized by the Australian Competition and Consumer Commission's (ACCC) characterization of the country's supermarket landscape as an "oligopoly," highlighting Amazon's emerging dominance. Amazon's expansion has also brought benefits to the Australian economy, including job creation in the logistics and e-commerce sectors, and driving innovation among local businesses.
However, Amazon's presence has also created challenges for local retailers, who are now faced with stiffer competition. Retail analysts predict that large local electronics retailers such as JB Hi-Fi and Harvey Norman will be among the most affected by Amazon's disruption. Amazon's aggressive pricing strategies and expanded offerings, including its own products and those of small local retailers, have intensified the competition in the Australian market.
Some of Amazon's top competitors in Australia include eBay, Big W, Kmart, AliExpress, Catch, Kogan, Myer, Target, Etsy, and Temu. These competitors offer a range of products across various categories, including fashion, technology, homewares, and beauty, providing consumers with alternatives to Amazon.
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Amazon's supply chain and technology
Amazon's supply chain is a fully automated set of services that manage the entire process from the manufacturer to the customer. This includes shipping products in bulk to Amazon Warehousing and Distribution (AWD) centres, where they are stored cost-effectively and become available for purchase as soon as they are received. Amazon also offers discounted cross-border shipments through Amazon Global Logistics (AGL), and its Partner Carrier Program (PCP) for shipping inventory to AWD centres.
The company's supply chain technology includes robots that work alongside humans to bring items to pick stations, where Amazon associates retrieve and package items for delivery. This combination of robotics and human labour increases efficiency and reduces costs. Amazon has also expanded its private fleet of long-haul and last-mile delivery trucks to reduce reliance on external carriers, and is developing a drone-based delivery system, Amazon Prime Air, for packages under five pounds within 10 miles of fulfilment centres.
In addition to its supply chain capabilities, Amazon has diversified its business beyond retail, producing various products from backpacks to smart speakers and virtual assistant AI technology. This expansion into manufacturing has provided critical revenue growth opportunities. Amazon's technological innovations and diverse business strategies have established it as a market leader in Australia and globally.
Amazon Australia has experienced rapid growth since its launch in 2017, with a significant increase in revenue and the number of sellers on its platform. In 2021, Amazon's sales revenue in Australia reached A$1.75 billion, and it has become one of the leading online marketplaces in the country, outpacing rivals such as Catch and Kogan. Amazon Prime memberships have also contributed significantly to the company's success in Australia, with a fast-growing local subscriber base.
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Amazon's future in Australia
Amazon Australia has experienced rapid growth since its launch in 2017, becoming one of the country's leading online marketplaces in just four years. With its "everything store" status and streaming offering through Amazon Prime, Amazon's sales revenue in Australia reached A$1.75 billion in 2021, more than doubling from the previous year.
Amazon Australia's growth has been significant, with a 1500% increase in revenue between 2017 and 2018. By 2021, the number of sellers on Amazon Australia had grown to nearly 14,000, and the platform attracted 14.3 million visitors in December of that year. Amazon's fast expansion in Australia can be attributed to its ability to attract third-party sellers, with over 2,000 signing up within 24 hours of its launch.
However, Amazon faces competition in the Australian market from eBay, which remains the market leader. eBay Australia has implemented strategies such as eBay Plus, offering free delivery and returns, to maintain its dominance. Despite this competition, Amazon Australia is the company's fastest-growing marketplace relative to its size, outpacing other markets like Japan, Mexico, Brazil, and China.
Looking to the future, Amazon Australia is well-positioned to continue its growth trajectory. By investing in logistics capabilities, creating new jobs, and supporting local communities, Amazon is committed to expanding its presence in the country. With Australia's e-commerce market expected to reach USD$16 billion by 2022, Amazon is poised to capture a significant share of this growing market.
Amazon Australia's focus on innovation, customer-centricity, and creating an inclusive culture also bodes well for its future prospects. The company's dedication to diversity, as seen through its efforts to build an LGBTQIA+ community, further demonstrates its long-term commitment to the Australian market. As Amazon continues to invest in the country and adapt to the needs of Australian consumers, its future in Australia looks promising.
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Frequently asked questions
Amazon Australia is the company's fastest-growing marketplace. It has been operating in the country since 2017, and its sales revenue hit A$1.75 billion in 2021.
Amazon Australia's sales revenue more than doubled between 2020 and 2021, from A$1.12 billion to A$1.75 billion. In comparison, eBay Australia, the market leader, had 75.7 million visitors in April 2021, while Amazon Australia had 10 million.
Amazon Australia's market share is growing, with analysts predicting that it will become the number one retail site in Australia. By 2026, Amazon Australia's online sales are expected to account for around 20% of all internet sales in the country.
Amazon has invested in its logistics capability, created new jobs, and supported local communities. It has also expanded its distribution capacity and launched one-day delivery for Prime members in some cities. Amazon has also increased the number of fulfilment centres in Australia, making its products more accessible to customers.
