What is Amazon up to in Australia, Singapore, and New Zealand

In the West, the Amazon effect is well-known. Amazon appears to be near unbeatable in markets where it is well-established, such as North America and much of Western Europe. But it's easy to overlook that Amazon doesn't have the same global domination - in fact, there are several regions where the company has had major difficulty establishing itself and earning a profit.

It’s been over four years since Amazon was poised to launch its B2C eCommerce platform throughout Asia-Pacific. In early 2017, even before making a public statement about its expansion in the Asia-Pacific region, Amazon was said to have rented 100,000 square feet of warehouse space in Singapore and hired 100 people in Sydney.

For various reasons, Amazon has expanded slowly into the Asia-Pacific region. A few reasons are due to the dispersed population or competition with local marketplaces.

So, what's occurred since then? Is Amazon as successful in the Asia Pacific as it is in other regions? And what are its prospects for success in each region?

Let’s take a closer look at Amazon in Asia-Pacific in 2020, particularly in Australia, Singapore, and New Zealand.

Amazon in Australia

Amazon's website has transitioned from a Kindle Store presence to a fully-fledged Amazon.com.au just in time for Christmas on November 23, 2017. Amazon has come a long way since its first day in Australia. The Australian version of Amazon is identical to the worldwide retailer's other regional versions for all intents and purposes.

It has the same appearance and feels as other Amazon sites but focuses on the Australian market, with prices set in Australian dollars. It includes all of Amazon's usual items and the Marketplace, which allows third-party retailers to list and sell their products.

Although Amazon Australia has proliferated over the past four years when it was initially launched in the land of down under, there were a few key features that were different:

Amazon Prime Wasn’t Offered

Despite the availability of Prime video and music streaming platforms, there were no Prime delivery methods.

Few Additional Features Were Available

Unlike Amazon.com or other regional versions, the menu items tend to be sparse, and there were few additional features – aside from the standard product categories.

Limited Amazon Product Listings

In contrast to other Amazon sites, Amazon.com.au had a small number of listings. The platform wasn’t selling many items either, with third-party listings accounting for 90% of existing listings.

Why?

This is because e-commerce isn't as common in Australia as in the rest of the world – at least not yet. While the awareness of Amazon is high, only 6% of Australia’s online shoppers were actively engaged with the platform. More than half of Australian shoppers didn’t consider Amazon the cheapest option, and they preferred to browse for products and purchase from their favorite brick-and-mortar store.

Furthermore, Australia's population is the world's most dispersed, making distribution and schedules challenging. Expectations of two or three weeks are common; therefore, e-commerce isn't as fast or simple as in other countries.

As a result, Amazon enjoyed the same customer engagement level as it does in other countries.

Despite the rough start, Amazon is slowly and steadily finding its way into the Australian market.

And now the Aussies are starting to feel “The Amazon (Australia) Effect”!

Amazon Australia has evolved from nothing to a marketplace with 10,000 Australian sellers, 100,000,000 products, and nearly 90% of Australians enjoying free two-day delivery on local products when they sign up for Prime.

After the debut, Amazon's web traffic grew by 42%... and it's still growing today.

The launch of Amazon business selling, Amazon Prime, Amazon Advertising, Brand Registry, and Amazon FBA are significant steps the marketplace has taken to infiltrate Australian culture. Their TV streaming service and subscription delivery are half the cost of their American counterpart. Other perks include free two-day shipping, unlimited eBook access, and many other features.

Following the launch of Prime membership and FBA, Amazon has grown its operations in Australia by opening new fulfillment centers, logistic sites, and parcel pick-up locations / HUBs across the country. And recently, we heard that they are nearly completing their first Amazon Robotics fulfillment center in Sydney. Spanning 200,000 square meters, the new fulfillment center will create more than 1,500 local jobs working alongside advanced robotics.

What an achievement!

Amazon in Singapore

Amazon was a latecomer to Southeast Asia, launching in Singapore in 2017, 22 years after the company originally began selling products in the United States. Singapore is the smallest country Amazon has launched in terms of population since it launched in over a dozen other countries. Although Singapore has a population of about 5.7 million people, we believe Amazon would use it as a testbed for corporate structures, workflow, and demand before expanding into other Southeast Asian and Asian countries.

Amazon did begin renting warehouse space in Singapore in 2016 and then formally opened on July 27, 2017. The emergence of Amazon in Singapore was the eCommerce behemoth's first foray into populous Southeast Asia and its first confrontation with Chinese rival Alibaba Group.

When it was first introduced to Singaporeans, Amazon’s offering differed greatly from its other regions. Before launching its official website – Amazon.sg, Prime members in Singapore were able to enjoy:

• Free Two-Hour Delivery with the PrimeNow app
• Free International Shipping on over 5 million items from Amazon US
• Stream from Amazon Prime videos
• Twitch game

The PrimeNow app was a scaled-down version of its full-service site and was available on mobile only. Despite the aggressive two-hour delivery service, the Prime Now app showed only a limited range of items, such as groceries, toiletries, and other daily essentials.

In 2019, Amazon finally launched a local site in Singapore. Amazon.sg has replaced the foreign selection on its Prime Now app and is available through the browser and mobile app, but it still has far less product assortment than its US counterpart, as a few consumers have already noticed. PrimeNow, - the groceries-dedicated shopping platform as of May 2021, has been replaced by Amazon Fresh.

In the second quarter of 2019, Amazon ranked 14th based on monthly web visits, as well as 4th on Google's Play Store and 6th on Apple App Store in Singapore, falling behind Lazada Group, Qoo10, Shopee, EZBuy, and Zalora.

This shows that Amazon is competing against several well-known platforms in the country, including Shopee in Southeast Asia, Qoo10 in Korea, and Lazada, which is majority-owned by Alibaba. With such harsh competition against local eCommerce, Amazon still has work to do before it can be considered as doing well in Southeast Asia.

Amazon recognized that young Singaporeans love purchasing from local businesses. As a strategy to foster growth in the new Singaporean market, Amazon waives fees associated with a professional selling account through the end of December 2021. Amazon's goal with this initiative is for sellers to sign up risk-free, see the benefits of selling on Amazon, and continue their business.

To further enhance their strategy, at the inaugural Amazon Southeast Asia Online Seller Summit 2021, it was announced that Amazon would be providing additional resources and support for small and medium-sized businesses (SMBs) in Singapore to start selling online and expand globally through its stores. This assistance expands on Amazon's current initiatives, such as the online seller education series, Seller University, and over 225 free tools and services to help sellers grow their sales in Amazon's Singapore and global stores.

In addition, as part of 2021’s National Day celebrations, Amazon is recognizing Singapore's small and medium-sized businesses (SMBs) and highlighting their success stories through a dedicated 'Shop Local' storefront on Amazon.sg.

Even though industry unicorns like Lazada and Shopee still dominate the Singaporean market, Amazon.sg seems to be successfully gaining ground – fueled by the COVID-19 pandemic. It was thriving during the first half of the pandemic, becoming the fourth-most visited eCommerce platform in the first half of 2020. Amazon.sg traffic increased from 2.8 million to an average of 3.6 million. Given its consistent growth and maturity in the eCommerce sector, Amazon.sg may catch up quickly in the coming quarters to increase its market share.

Amazon in New Zealand

On July 6, 2021, more than three years after Amazon launched in Australia, customers in New Zealand can shop from millions of products on Amazon.com.au and have them delivered directly to their door from the Australian distribution center.

The launch promises speedier and less expensive delivery. Customers can pay AU$ 6.99 for expedited delivery to certain areas in Auckland and Christchurch in as little as three working days or AU$ 2.99 for standard delivery. Amazon in New Zealand also comes with easy returns, with most items coming with a postage-paid label, enabling them to schedule an at-home pick-up. Items for return can also be dropped off at a nearby DHL location.

New Zealanders previously had to rely on delivery from Amazon's US shop or third-party re-senders like NZ Post's YouShop if the items didn't ship directly.

Both of these options could raise the purchasing price significantly.

Customers in New Zealand can shop from anywhere at any time using the Amazon Shopping app and desktop and mobile browsers. Customers can also track their orders, contact customer service 24 hours a day, read product reviews, or simply browse the expanding selection at their leisure.

Customers can also shop from native small New Zealand businesses such as Serious Food Co, The Herb Farm, and Bella Honey, which sell over the ditch using the Amazon.com.au platform. At the same time, customers can also purchase products from small Australian businesses such as Zenify, based in Sydney, and Little Archer & Co., based in Queensland.

New Zealand local sellers can also create listings on Amazon.com.au to make their products available to Australian and New Zealand customers.

On a side note, it seems like New Zealand has welcomed Amazon with open arms. Despite concerns about how long New Zealand will be associated with the series if Amazon sends future episodes abroad, the government awarded them a $160 million tax break in exchange for the corporation filming its TV series Lord of the Rings. Amazon looks to have won the negotiation, receiving the additional subsidy without a long-term commitment from the government. The government received only vague assurances from Amazon to create a "wider partnership between New Zealand and the Amazon Group."

The Future of Amazon in Asia-Pacific

Amazon was a late arrival to Asia-Pacific; many wonders if the platform will be as successful as it is in other regions. Even though it is too soon, Amazon should learn from its previous expansion in Japan and India. Both regions are already experiencing the Amazon effect, which includes reduced margins for branded goods and a dramatic increase in consumer expectations for marketplace fulfillment. Amazon will have to work hard to convince online shoppers to switch to a superior customer experience. But one thing we know for sure, Amazon always gets serious about expansions, and they are in it for the long term.

Amazon may not strike swiftly in Singapore and Australia, but if Japan and India are any indications of its future approach in the region, it will strike hard. As a result, local sellers should be watchful and prepared if they want to grow their business by selling on Amazon.

Check out Merchant Spring’s all-in-one monitoring tool for multiple marketplaces today.

Guest Author

James Dihardjo

Co-Founder | MerchantSpring

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