Is Amazon set to enter the Australian grocery market?

Posted by AFN Staff Writers on 10th September 2014
Is Amazon set to enter the Australian grocery market?
Is Amazon set to enter the Australian grocery market?

Global retail giant Amazon could be preparing to enter the Australian grocery market, with Amazon advertising for a software development engineer in Brisbane for its AmazonFresh grocery delivery business.

AmazonFresh is Amazon’s grocery and non-grocery home delivery service in Seattle, Los Angeles and San Francisco that delivers a unique selection of more than 500,000 ‘everyday essentials’ to its customers. The Company offers a huge selection, including fresh produce, locally sourced meat, seafood and dry goods, and non-grocery items, delivered at your doorstep from the time slot of your choice.

Australian Food News reported in July 2013 that AmazonFresh had expanded its service area from Seattle to Los Angeles and San Francisco, shortly after Google had also moved into the grocery delivery sector, launching its Google Shopping Express service the San Francisco Bay Area in March 2013.

“We are looking for a software engineer to design and develop the systems that power our service and help us take this business to the next level,” AmazonFresh said in its job advertisement. “As a member of a team focused on innovation, you will responsible for building a system to support a new and confidential AmazonFresh initiative that will help revolutionise the grocery shopping experience,” the Company said.

Online groceries in Australia

In Australia, both major supermarket groups Coles and Woolworths offer an online grocery service where consumers can order food online and have it delivered to their door.

There are other smaller players in the online groceries sector, including the independently-owned Aussie Farmers Direct, which has more than 200 franchisees servicing regional and metropolitan areas in Victoria, New South Wales, ACT, Queensland, South Australia and Western Australia.

In 2013, Aussie Farmers Direct said research from the University of Washington about the reduction in carbon emissions from online grocery shopping confirms the Company’s own findings.

Braeden Lord, Aussie Farmers Direct CEO said the Company had worked out that each milk delivery van kept “more than a hundred cars off the road, saving time and money for Australian shoppers”.

“This is a very significant finding,” Mr Lord said. “Obviously we believe online shopping is a contemporary way to shop – the research is proving it to be more sustainable as well,” he said.

Online shopping on the rise in Australia

Meanwhile, at around the same time, findings from market research organisation Roy Morgan Research showed that Food and Beverages were among the top 5 categories by expenditure in online shopping in Australia.

The findings showed a clear trend towards internet shopping, with Australians who do not buy something online in an average three month period becoming a minority for the first time in 2013.

Australians aged 14 and over spent $24.3 billion online in the 12 months to March 2013, an increase of 11.9 per cent on the previous year, according to the latest consumer data from Roy Morgan Research. Total retail sales, however, rose only 3.4 per cent in the same period.

According to Roy Morgan Research, the average internet shopper spent $285 online per four week period, with Travel, Entertainment and Leisure, Electronics, Fashion and Food and Beverages the Top 5 categories by expenditure.