Tuesday, 11 April 2017 11:36

Amazon Australia entry 'will be biggest challenge to locals'

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The entry of Amazon into the online retailing market in Australia and New Zealand, which is expected later this year, will be the biggest challenge that local online retailers will face, an ecommerce expert says.

Dr Shaun Ryan, vice-president of corporate development and co-founder of SLI Systems, told iTWire that while most online retailers were bracing for the arrival of Amazon, there were still some advantages for locals.

SLI is a global leader and provider of cloud-based ecommerce solutions and services.

However, he added, these factors should be taken advantage of, else Amazon would win any sales battle hands down.

Dr Ryan said Amazon had the advantage when it came to sales volumes, given the massive inventory it maintained. Additionally, the US giant would be able to satisfy the desires of those who wanted to buy items from abroad for which warranties were not offered in Australia.

When it came to website navigation and customisation, again Amazon was ahead in the game, Dr Ryan said. This was especially the case when it came to sites that were customised for mobile use; mobile users made up a fair percentage of online buyers these days.

However, looking on the bright side for the locals, Dr Ryan said that the local recognition factor was a plus that should be exploited. Additionally, local online retailers should shore up their servicing levels and interact more with customers, he advised.

SLI recently issued a report on ecommerce performance indicators that showed globally online retailer confidence was strong, with 80% forecasting a rise in online revenue this quarter and 46% predicting an increase in in-store revenues.

This confidence was also evident in Australia, with 92% of online Australian retailers surveyed planning to grow their product range this quarter.

Two-thirds said they would be investing in new technology and expanding their teams while a further 31% were planning to add additional websites or brands.

Dr Ryan said Amazon would also have an advantage in delivery – both in terms of speed and also in offering replacements when orders went missing.

He said he was not sure what demographic would be likely to switch to a store like Amazon if they were currently doing business with a local online store.

But overall, the competition would be good for the consumer because it was a Darwinian situation where those who did not adapt would fall by the wayside, he added.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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