Amazon’s huge investment into the Australian retail market could see the American juggernaut claim almost a third of all online sales within 10 years.
Analysts from Morningstar Equity Research forecast Amazon to account for about 25 per cent of local online retail sales, or five per cent of the total retail market, by 2030.
The Morningstar analysts agree that discretionary and food products’ retail sales have spiked up, thanks to the pandemic. But this unprecedented upward curve has masked the underlying macroeconomic and operational challenges.
According to 9News, Amazon is expected to take a disproportionate share of this future growth. Considering its new warehouses, Morningstar estimates Amazon will record nearly $9 billion in sales in 2025.
The US-company has been quietly laying the groundwork, opening amazon seller centres in Melbourne, Sydney, and Perth in the last few years. Now it’s got designs on a much larger future in Australia, building a Brisbane facility in addition to two more Melbourne and Sydney sites.
Amazon Prime is on the way
The main driving force behind this take-over will be Amazon’s massive infrastructure in Australia, most recently highlighted by the erection of the largest warehouse in the Southern Hemisphere in Western Sydney. They forecast Amazon Australia’s local footprint to triple in this year, 2021, and continue to claim a considerable chunk of the country’s retail turnover. The NSW government welcomed the construction of a massive warehouse that will house the company’s distribution hub. The warehouse is the largest in Southern Hemisphere, measuring about 200,000 square meters (equivalent to 24 rugby fields). It has the capability of picking and packing more than 25 thousand customer orders every single hour.
Amazon job creation
While Amazon is employing automation and robotics to do the heaviest lifting in this center, the Aussie humans need not worry that they’ll be no human employment. Plans are underway to deliver more than 1500 new jobs, including entry-level, graduate, and leadership roles. They need for human brains and talents is growing especially in computer science, robotics technology, supply chain, and many other areas. The human-robots integration will tremendously contribute towards their goal of dominating the local retail landscape. This is straight out of the playbook that has seen them dominate other marketplaces like Canada, the UK and of course the USA.
The analysts believe these retailers’ brick-and-mortar stores will not perform well in the long run. This trend may see their omnichannel sales performance experiencing a persistent headwind.
