Amazon‘s long awaited launch in Australia finally came late last year, just before Christmas. A fully-fledged retail and marketplace Amazon Australia went live and was soon followed by the introduction of FBA and announcements of expansion to the fulfilment network, including several new fulfilment centres.
So last week’s announcement that they would be limiting the Amazon services to Australian shoppers came as something of a surprise. The local marketplace and retail operation will remain fully operational and a limited number of international products will still be available. But Aussie shoppers will no longer be able to use any of Amazon’s international sites as of the 1st July.
It’s a direct response to Australia’s introduction of new GST rules for imports which come into force on that day. We’ve written about GST here. But, in short, it will bring lots of imported goods under the pale of the local Goods and Services Tax which will increase costs and admin for exporters to Australia.
This move will lead to a dramatic decrease in products available on Amazon down under from 500 million to 60 million. Considering that selection is one of Amazon’s touchstones that will greatly diminish their attraction
Amazon said that it had assessed the “workability” of the new rules and reluctantly gone down the path and apologised for any “inconvenience”. More likely was the prospect of a GST bill expected to be in the region of $4.5bn AUD. Some have seen this as a shot across the bows of the Australian government in the hope of extracting concessions by the authorities. The Australian Government has said it will be making no deals.
Amazon Australia’s retreat doesn’t create a vacuum but it does open up a number of opportunities and eBay is well-placed to take advantage. eBay has already been making advances to develop its offerings. Recently they launched eBay Plus, a service similar to Prime, and they have also been strongly promoting the marketplace, including a TV ad featuring cricketer Shane Warne. They have also announced that they have a system in place to help buyers and sellers deal with GST.
And one aspect of recent marketing has been eBay emphasising its local credentials and supporting Aussie SMEs. And this may now prove to have been a very canny move. The Australians are a proud nation and Amazon’s retreat can easily be characterised as it turning its back on a relatively small market and a snub to Aussie shoppers.
eBay, however, has positioned itself as proud to serve Australia and won’t be walking away because of the new difficulties and that, alongside the fact you can still shop overseas there, may prove to be a major competitive advantage for them down under as this situation continues to roll forward.