Amazon launched a local website in that country in December, followed by the introduction of faster product deliveries via the eCommerce operator’s Prime loyalty program. But Amazon offers “a product range roughly one ninth of the U.S. site, which sells some goods at higher prices,” according to a Reuters article on Thursday (July 19).
Taxes aren’t helping, either. Starting July 1, Australia has imposed a 10 percent goods and services tax on “all goods online bought from overseas.” Before July 1, that tax applied only to purchases of foreign goods of at least A$1,000, or about US$745.
The Australian government announced the tax change a year ago, but Amazon reportedly started telling its customers in Australia about the change only a month ago. Entering an Australian delivery address when trying to use a non-Australia Amazon site to complete a purchase results in the eCommerce site cutting off that transaction. “Critics say the decision was an excuse to drive traffic to its new local site and promote its Amazon Prime service,” the report said.
“I’ve no doubt that Amazon will be successful here in time, but I don’t believe that this strategy is what’s going to catapult them to success,” said Ryan Murtagh, CEO of Neto, a provider of data and logistics support for about 3,000 online retailers in Australia.
All of this is reportedly benefiting eBay.
The online marketplace operator decided to “offer Australian shoppers a 10 percent discount on its local, British and U.S. websites for the first week of July to help generate business.” In Australia, eBay offers a larger product selection than Amazon, according to the report, which quoted a consumer shopping for wall mounts to illustrate the lower prices that shoppers often find on eBay relative to Amazon.
The report offered no figures that dig deeply in the changing fortunes of eBay and Amazon in Australia, but said that negative consumer comments about Amazon have been increasingly popping up on social media sites since the new tax took effect.