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KING OF THE JUNGLE? Amazon sets to shake-up Christmas war

AMAZON'S highly anticipated Australian launch today could ignite a pre-Christmas price war for consumers as existing retailers fought to offer lower prices across the board, faster shipping, and "keep up" with its online innovations.

The international retail giant prepared for its official Black Friday launch today, following an invitation-only "soft launch" in Australia yesterday and months of speculation.

Retail analysts predicted its arrival would fall short of creating the "retail apocalypse" some feared but new PayPal research revealed almost one in three small business owners were "stressed" about its arrival.

Amazon's early launch proved an anticlimax to many hopeful online shoppers yesterday, as it only showed a limited number of listings to a select group of customers.

But Gartner research analyst Thomas O'Connor said consumers would be the winners out of Amazon's launch as Australian retailers were already lowering prices and lifting their game to meet the foreign competition, with retailers like JB Hi-Fi launching same-day deliveries and Woolworths announcing plans to trial one-hour deliveries from "dark stores" in Sydney.

Amazon was unlikely to deliver cheaper prices on all items, Mr O'Connor predicted, though there would be some door buster-style specials on offer.

"Amazon is likely to have some loss-leaders, or some products that will be the cheapest in the market, but they won't be the cheapest in everything," he said.

"Australians have been building their hopes up too high that Amazon will be the cheapest across a full range of products."

The company could ignite a price war if it chose to "undercut Harvey Norman" on everyday staples, though, according to one Australian business owner listing goods with Amazon yesterday who asked not to be named.

Aussie retail giants are concerned about the arrival of Amazon.
Aussie retail giants are concerned about the arrival of Amazon.

Founder Gerry Harvey said his retail chain would likely match price with Amazon if they launch "competitive" prices, but "if they come out and do bait advertising and predatory pricing, that's a different thing".

Mr O'Connor said large Australian chains and retailers without modern online strategies were justified in their concerns about Amazon's arrival, though it would fall well short of the "retail apocalypse" some predicted.

"There will be some players who fall over, there will be some players who do struggle, but there will be others who position themselves effectively," Mr O'Connor said.

"I don't think there's any doubt that retailers need to be concerned and need to be driving innovation in their own businesses and rethinking their operations, not resting on their laurels."

The additional competition is putting small and medium businesses under serious pressure, according to PayPal research released today (Friday), which showed almost one in three were concerned about growing online competition stealing sales.

PayPal Australia spokesman Brian McDonnell said the study of 200 business owners showed they were keenly aware about the added rivalry for Christmas purchases this year.

"Twenty-eight per cent of businesses surveyed are stressed about online competition," he said. "Amazon definitely factors into their thought processes there."

The study also showed two in three business owners were stressed about the holiday season, and one quarter said they didn't have time to relax or complete their own Christmas shopping.

Topics:  amazon business retail



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