Amazon Brings One Piece of Good News for Australian Retailers

Queensland University of Technology’s Gary Mortimer discusses the launch of Amazon in Australia.

As Amazon.com Inc. prepares to open its Australian site, analysts are fretting over who will be worst hit: big-box retailers such as JB Hi-Fi Ltd., mall owners, or small brick-and-mortar stores.

Cathie Wood, chief executive officer of U.S.-based ARK Investment Management, has some good news for latter, as businesses sign up to Amazon’s marketplace. She reckons Amazon’s arrival will haul the country’s lagging online sales to 10 percent of total retail spending -- up from about 7.4 percent this year according to IBISWorld estimates.

“With Amazon accelerating the move into online retail with some of the local Australian retailers leveraging the fulfillment-by-Amazon platform, I don’t think it will take very long to get to 10 percent: maybe 18 months to two years,” Wood said.

Wood said online retail will start to grow faster once it secures 10 percent market share.

“We have noticed over time that whenever a trend hits 10 percent market share, it’s usually moving into the sweet spot of what we call the ‘S curve,”’ she said. “We say this is an accelerating growth story.”

ARK Investment buys equity stakes in ‘disruptive’ technology companies, and lists Amazon among its top 10 stocks. 

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