- The company's parent company's investment increased by 50% to A$371 million.
- Amazon Australia has established stronger customer and seller relationships over the last 12 months.
- Amazon Australia's sales revenue is significantly higher than the revenue of some of its closest competitors in the marketplace.
The global e-commerce giant Amazon’s revenue in Australia has surpassed the A$1 billion mark. In 2020, the epidemic has driven a surge in online shopping. The financial report released on Friday night showed that Amazon Australia’s retail division’s net sales for the calendar year of 2020 were A$1.12 billion, a 99.4% jump from the previous year.
The company’s parent company’s investment increased by 50% to A$371 million. This provided funds for Amazon to open new distribution centers in Sydney, Brisbane, and Melbourne, as well as for more expansion measures.
“Expectations were high early on but as we looked at the range they entered the market with and the development of that range, it was clear early on it was going to be a slower ramp-up than we thought before they entered,” said Credit Suisse analyst Grant Saligari.
Amazon Australia has established stronger customer and seller relationships over the last 12 months. Amazon is selling digital products like books, CDs, DVDs, and even electronics, like televisions and laptops.
In November 2020 it expanded its physical locations to include Melbourne and Brisbane. It now has over 224 retail and warehouse locations in total. Amazon Australia sales doubled in January this year and it is projecting double-digit growth in future years.
“Online has necessitated investment but for a number of retailers it’s turned out to be a profitable venture and I don’t think Amazon would be negatively impacting profitability yet – that’s not to say it might not in future,” Dr Saligari said.
“Over the past year, our focus has remained on the health and safety of our people, helping customers stay home and safe by delivering products directly to their door, and supporting local communities and selling partners during this challenging time,” an Amazon spokeswoman said.
Amazon Australia’s sales revenue is significantly higher than the revenue of some of its closest competitors in the marketplace. The reason for this is easy to see.
When someone buys a product on Amazon and purchases the same item from another merchant at a later date, Amazon takes on the difference between the price that has been paid for the product and the amount that is owed to Amazon. Amazon takes a certain percentage of the sales and pays taxes and local duty that it is legally obligated to pay on that income.
Amazon Australia’s ability to increase its sales revenue is perhaps unsurprising given the size and scope of the digital marketplace. Australia is an important part of the global e-commerce network.
E-commerce businesses such as Amazon have shown a willingness to expand into new markets, such as Australia, in order to tap into the massive potential this country has to offer. Amazon has provided consumers with excellent value and this value-add has driven up the cost of products sold on Amazon.