Amazon Is Coming, Are You Ready?
Amazon is setting up shop in Australia, will you make money or lose money?
Why should Aussies worry about losing money?
Do you have any investment exposure to Australian retail companies?
This could be direct investment in listed shares or indirectly through your super fund. One of Australia’s largest retailers Wesfarmers (which owns Coles, Kmart, Target) alone has over half a million direct shareholders.
The arrival of Amazon should be a concern for shareholders of Wesfarmers and other Aussie retailers.
It’s happening. Amazon has officially confirmed it is setting up an online shop in Australia. This is great news for many Aussies who right now can only buy through offshore Amazon online stores (e.g. in the U.S.) with much higher delivery fees and longer delivery times to Australia. There are reports Amazon will also offer prices up to 30% cheaper than local stores. Combined with the Amazon Prime delivery (a yearly fixed fee for unlimited free priority shipping as well as access to Netflix competitor, Amazon Prime Video), consumers look set to be the big winners.
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Richard Goyder, the outgoing CEO of Wesfarmers, has gone as far as saying Amazon will “eat all our breakfasts, lunches and dinners”unless the retail sector innovates. This chart clearly shows why he is right to be wary of Amazon’s disruptive power.