Amazon is set to launch in Australia with executives from the global online Company holding discussions with Australian Freight Companies, Uber, a local mapping Company and leading distributors of goods.
The USA online giant has already held discussions with both Ingram Micro and Synnex as well as several leading brands regarding supplies to local distributors as well as in the future to Amazon warehouses in individual States.
insiders telling ChannelNews that when the Company does launch in Australia which is now tipped to be 2017 they are determined to deliver a 2-hour delivery service for customers.
Amazon executives are also looking at the possibility of using already established logistic Companies to distribute products as opposed to their own warehouses due to the small population, size, (25M) and large distances in Australia.
According to sources Amazon executives have been talking to Here Mapping the Company that is owned by in part by BMW, Audi and Daimler Mercedes.
What they are looking for is the ability to GPS track deliveries from Uber drivers doing local deliveries for fixed prices to transport Companies who can deliver within two hours of an order being placed. By being able to track delivers Amazon can accurately message consumers as to when their delivery will be made.
According to sources Amazon were told by major transport groups such as Star Track, that a two-hour delivery service would not work in Australia and that Australians were more accustomed to “next day delivery”.
While Australia is seen as a growth market for Amazon not all products sold on the US site will be available to Australian customers who predominantly buy books from the mass online retailer.
Shares of the e-commerce giant have fallen more than 16% since the beginning of 2016, recently analysts have lowered their estimates for its future earnings.
In December 2015, analyst expected Amazon to post 2016 operating income of $4.5 billion.
Since then that estimate has since fallen to slightly less than $4 billion. Estimates for 2017 and 2018 have similarly declined. A major factor in those now lowered expectations: increasing competition for its Amazon Web Services cloud business which is doing a roaring trade in Australia.
The rapid growth of the high-margin AWS business has driven the bulk of Amazon’s recent profits.
What is not known is whether Amazon will simply strip revenue out of Australia while paying on ly the minim um amount of tax.
