Things didn’t go quite to plan, but Amazon says it was the best launch ever and is offering pretty good deals on some hot Christmas items. Amazon’s Australian launch was the most successful in the company’s history.
The e-commerce giant says it received more orders on Tuesday than any other launch day, with “tens of thousands” of customers who visited the website during the first 24 hours placing orders across all of its 23 categories.
“We are thankful to Australian customers for making this a landmark day in Amazon history,” Amazon Australia country manager Rocco Braeuniger said in a statement on Wednesday.
“From early in the day, we experienced visitor numbers that far exceeded our expectations. Yesterday was day one for our retail offering in Australia.
“We will be working hard today and in the long-term to continue to enhance our offering and to provide customers with an ever increasing selection of products at low prices.”
Among Amazon’s best-sellers were the Lego Star Wars BB-8 set, the Skip Hop Explore and More Musical Egg Shaker Trio, Tommy Hilfiger Men’s Polos and the Heller 6L Pressure Cooker. Make-up brush sets, FitBits and Rubbermaid scrubbers were also popular.
Despite the numbers, Tuesday’s launch was met with a lukewarm response from shoppers, many of whom complained that Amazon’s prices were more or less the same as local retailers — and in some cases significantly more expensive — causing the share prices of major listed retailers to rally.
Harvey Norman boss Gerry Harvey described the “lame duck” launch as “beautiful”. “I can’t believe how bad they are,” he told Sky News. “But it’s good news for everybody, because the hype has been ridiculous and the result has been, well, you couldn’t be this bad.
“I’ve been very disappointed with our share price, it’s been under $4 for a long time, and there’s only one reason it’s not $6 in my opinion, and that is because people think Amazon is going to extinguish Harvey Norman.”
Mr Harvey predicted Amazon would struggle to gain share in the Australian market.
“I’ve just come back from Singapore and Malaysia, we deal over there against Amazon, Alibaba and all the rest of them, it’s much, much more competition there and our sales are going up,” he said.
“In Canada, with a much greater population, they’ve gathered three per cent of the market or something. Amazon were never going to find it easy here. They’ve never made money in 23 years in retail and they never will.
“They’re going to operate in this huge time frame making a loss every year, spinning a story about what a wonderful business they’ve got.”
Vertium Asset Management analyst Daniel Mueller described the launch as “pretty underwhelming”. “The listed retailers, JB Hi-Fi, Harvey Norman and Super Retail, all had quite a considerable bounce yesterday,” he said.
“I think it’s just the realisation that Amazon’s not going to kill Australian retail, at least not today. It hasn’t gotten off to the right start, but it can certainly change perceptions over time. It seems like only yesterday Woolworths was struggling with price perception, now it’s kicking goals.”
Mr Mueller said his price analysis showed “much of a muchness”, with Amazon slightly cheaper in some categories but considerably pricier on certain items, such as the iPhone X which is 20 per cent more expensive than at JB Hi-Fi.
Amazon was “a little more competitive” on some lower-priced items such as books and dry grocery, he said, but in general was more expensive than Baby Bunting in the kids and babies category.
“I think it’s going to be a slow grind. When you look at overseas comparisons, [Amazon] does take a long time to penetrate markets and gain share, [and Australia is already] underpenetrated online. For whatever reason, Australians don’t mind a bit of bricks-and-mortar shopping.”
In a note on Tuesday, Citi analyst Brian Raymond said “based on the current offer”, Amazon would not be disruptive to Australian retailers this Christmas.
He described the range as “patchy across and within categories” and pricing by third-party sellers, which currently provide the bulk of Amazon’s range, as “typically in-line and in some cases above retailer prices”.
Nevertheless, Amazon is currently offering up some pretty good deals on selected items in its “top picks” section, as you would expect.
The Fire TV streaming device, which allows users to access content from services including Prime Video and Netflix, is being offered to Australian customers for the first time at $69.
The timing is slightly awkward, however, with Google announcing late on Tuesday it was blocking YouTube from Fire TV amid an escalating dispute over Amazon’s refusal to sell competing gadgets, including Google’s Chromecast streaming device and Home internet-connected speaker.
The Lego First Order Star Destroyer set is $175, $24 cheaper than at Kmart, while the best-selling Lego Star Wars BB-8 set and the Lego Jungle Exploration Site set are both $19 cheaper than Target at $100.
The Philips Airfryer TurboStar Black is $259, $70 cheaper than at David Jones — although the same price as Bing Lee — and you can get a 1TB Seagate Portable Drive for $70, $9 cheaper than Officeworks.
Consoles are also a good buy, with Amazon is also selling an Xbox One Minecraft Limited Edition for $319, $60 cheaper than at EB Games, and a PlayStation 4 500GB White for $399, $40 dollars cheaper than EB Games. Also at $399, the Nintendo Switch Neon Blue and Red is $70 cheaper than JB Hi-Fi.
The Tefal IT2110 Instant Steam Garment Steamer is $110, $9 cheaper than Harvey Norman and $19 cheaper than Big W. If you’re the kind of person who buys your software, you can grab a copy of Microsoft Office 2016 Home and Student for $150, $24 cheaper than at Officeworks.
The Fitbit Charge 2 Activity Tracker is $135, just squeezing in ahead of Officeworks’ current sale price of $137 but a whole $43 cheaper than Rebel, while at $244 the Jabra Elite Sport Wireless Waterproof Earbuds are $33 cheaper than Harvey Norman and $105 cheaper than JB Hi-Fi.
But in a further sign this rollout won’t be smooth sailing, nearly half of the items in Amazon’s “top picks” can be found more cheaply elsewhere.
The GoPro Hero 6 Black camera will set you back $699 plus $7.95 delivery, $9.95 more expensive overall than Harvey Norman and $105.95 more expensive than CameraSky.
At $228, the Sonos Play 1 Black speaker is $19 more expensive than at Digital Cinema, and at $140 the Netgear D6200 Wi-Fi Modem Router is $21 more expensive than at Wireless 1, which also beats Amazon’s price for Sennheiser PXC 550 Wireless headphones by $11 at $390 versus $379.
Similarly, at $210.40 the Sennheiser HD 4.50 Bluetooth headphones are $11.40 more expensive than the current price on both Catch.com.au and Digital World International. And while the Sunbeam EM0480 Cafe Series Burr Coffee Grinder is $34 cheaper than Bing Lee at $135, you can grab it on eBay for just $99.