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Amazon warehouse poses threat to New Zealand online retailers

28 Nov 14

Rumour has it Amazon will open a warehouse in Queensland, Australia. This could disrupt the reseller market in Australia and New Zealand, with Amazon beating out competitors such as TradeMe and The Warehouse.

In the past, rumours that Amazon would set up shop in Australia have circulated and nothing has come of it. However, should Amazon open a warehouse in Australia, it would increase the speed with which products could be shipped to shoppers in ANZ and could have a significant impact on resellers.

The extent of the impact would depend on how large the warehouse was and the range of locally stocked products.

Currently, Amazon has approximately 100 warehouses in North America, 29 in Europe and 34 throughout China, Japan and India, with the majority of them measuring tens of thousands of square metres.

Earlier this month, Rob Norman, GroupM, chief digital officer, spoke at an Interactive Advertising Bureau (IAB) event about the threat Amazon will pose to online retailers when it launches in Australia.

“I have the sense that there are a bunch of businesses in Australia that are imperilling themselves by not embracing e-commerce the way they could,” Norman says.

He says the e-commerce business is underdeveloped compared to the rest of the world and there is a lack of correlation between high levels on online advertising and slow rise of e-commerce.

“I think when Amazon is in Australia itself, and I believe they are on the hunt for real estate, people will make the mistake of thinking ‘it will be hard for them to compete on economic grounds’, but that is predicated on the presumption that they care. Everything we have seen is that Amazon doesn’t care about that,” Norman says.

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