Amazon to shake up Aussie retail sector

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AAP

Amazon is preparing to launch in Australia in a move that's expected to bring shoppers lower prices and retailers more pain.

The e-commerce giant confirmed yesterday it will be ramping up its operations to include Amazon Marketplace, where Amazon and small local retailers can sell goods, on its Australian website.

The American company already sells Kindle e-reader devices, audio books and content in Australia.

"The next step is to bring a retail offering to Australia, and we are making those plans now," Amazon said in a brief statement.

The company has also invited local retailers to join it as a third party seller.

Amazon has not said when the rollout will happen or what its site will offer, but did say it will focus on "low prices, vast selection, and fast delivery".

The retail behemoth, which generates annual global sales of more than $142 billion, is known for aggressively low prices.

It's good news for consumers, but analysts say it could hurt the profits and operations of many Australian retailers, from consumer electronics to fashion.

IBISWorld senior industry analyst Andrew Ledovskikh said Amazon would likely pose the biggest threat to electronic retailers at first, including JB Hi-Fi and Harvey Norman.

"It is a massive challenge to compete with Amazon which has a lot of capital backing and a long term strategy," Mr Ledovskikh said.

"They are willing to have small margins or operate at a loss for an extended period of time.

"Companies like JB Hi-Fi and Harvey Norman probably don't have that luxury to cut into their profit margins just to absorb market share."

But Australia's vast geography and less concentrated population will pose challenges for Amazon's distribution network, he said.

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