Amazon launches in Australia with 'millions' of products, hopes to win consumers' trust

Australia's $300 billion retail sector will face its reckoning on Tuesday after global e-commerce giant Amazon ended months of speculation by flicking the switch on its local website. 

Amazon has started taking orders and shipping products from its warehouse in Melbourne's east.  

"Millions" of products are available across 23 categories, including consumer electronics, sports and outdoor goods, toys, home improvement and tools, and clothing and accessories, it said. 

Amazon has launched with both its own retail offer, in which it sells and ships items direct to customers, and its "third-party" marketplace with allows other businesses to sell through Amazon's website. 

Amazon confirmed in April it was bringing a full retail offer to Australia, but its exact plans for what products and services it would introduce have been a carefully guarded secret. 

With 23 product categories, the Australian launch is broader than in some other markets it has launched in, which include Spain, Canada, the United Kingdom and Ireland, Italy Brazil and Japan. 

Baby goods including nappies, kitchenware, office products, shoes, and watches will also be available. Amazon said it had signed up brands including Bonds, Puma, Lego, L'Oreal, Sunbeam, Huggies and Tommy Hilfiger and would also sell private label products. 

Amazon Australia is open for business.

Amazon Australia is open for business.

Amazon Australia's country manager Rocco Braeuniger said the company would add more products and services regularly.   

"We hope to earn the trust and the custom of Australian shoppers in the years to come," Mr Braeuniger said. 

Delivery speed has been a decisive factor in Amazon's popularity in the other markets. In Australia, next-day delivery will cost $9.99 in Sydney, Melbourne, Brisbane, Adelaide and Canberra. Customers in Perth and regional cities in Victoria, NSW and SA will pay $11.99 for delivery within two days.  

Saturday deliveries will be available for those capital cities. Priority shipping to all other areas will cost $19.99.  

Rocco Braeuniger, Amazon's Australian country manager.  Photo: Amazon.de

Rocco Braeuniger, Amazon's Australian country manager. Photo: Amazon.de

"Expedited delivery" of two to three days will cost $5.99 for eastern capitals and $7.99 for Perth. Free shipping will be available on orders direct from Amazon worth over $49, but will take between three days and a week to arrive. 

But customers will have to wait until mid-next year to sign up to its popular Prime subscription service, which gives members free express shipping. Amazon said its two-hour delivery "Prime Now" service would not be available until some time after that. 

Local shoppers have previously been able to shop on Amazon's US website, but only limited items can be shipped to Australia.  

Amazon's impending arrival has weighed on the share prices of Australia's listed retailers over the past year. While analysts do not expect Amazon to capture significant market share at first, they say incumbent retailers' will have to sacrifice earnings and cut prices to remain competitive. 

Citi analysts said last month they did not expect Amazon to ruin the important Christmas sales period for Australian retailers, as it was not likely to see significant sale volumes, but could hurt them if they chose to price match.  

The same analysts predicted retailers would have to drop the price of electronic goods by about 10 per cent after Amazon's arrival. 

UBS analyst Ben Gilbert said last week the Amazon's arrival would be a step-change in Australian e-commerce, and would spark a doubling of the rate at which consumers are moving online to shop. 

Online retail sales have grown at 13 per cent this year - far outstripping total sales in the sluggish retail market of 2.9 per cent. 

Amazon has a market capitalisation of $US560 billion ($737 billion) - more than double that of Wesfarmers, Woolworths, Commonwealth Bank and Westpac combined. 

Analysts and retail insiders had been tipping a pre-Christmas launch, predicting it could go live on "Black Friday" or last week's "Cyber Monday" shopping events and speculation reached fever pitch in the last week of November when Amazon told third-party sellers to prepare to receive orders.