Amazon will block Australia-based customers trying to buy products on its overseas sites when the GST is applied to all imported e-commerce items in July.
Source: 1 NEWS
From July 1, Amazon will redirect local shoppers trying to visit the likes of Amazon.com and Amazon.co.uk to its much smaller Australian site, thwarting those who enjoy the lower prices offered abroad.
The move is a response to the government's decision to slap the 10 per cent goods and services tax on all items bought from overseas sites and shipped to Australia, rather than just those worth more than $1,000 as at present.
Without blocking the overseas orders, Amazon would have had to cut its already thin margins or pass on the charge to customers.
"While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites," an Amazon spokesman said in a statement today.
The move may help drive traffic to Amazon's Australian website, which has drawn criticism for a thin product range and uncompetitive prices since it began taking orders in December.
However, it may also boost sales for Australian retailers, including traditional bricks-and-mortar stores hurt by the rise of online shopping.
Retail stocks on the ASX rose following Amazon's announcement.
At 1422 AEST, shares in local e-commerce site Kogan.com were up 11 cents, or 1.2 per cent, at $9.18, while shares of electronics retailers JB Hi-Fi and Harvey Norman were up about 2.3 per cent and 1.0 per cent, respectively.
Some 4.6 million Australians visited Amazon's US site in November 2017, the month before its Australian website went live, according to consumer metrics company Nielsen.
Amazon says its Australian unit offers 60 million products in 23 categories, compared to the more than half a billion products on its US site.