Amazon entry overplayed says IBISWorld
AmazonFresh’s entry into Australia has been “overplayed” says market research firm, IBISWorld.
According IBISWorld, traditional brick-and-mortar supermarkets and already-existent online grocery retailers will not be as severely affected by Amazon as operators in other retail industries.
“While AmazonFresh will offer competitive pricing and use the latest technology, the effect on the major supermarket players will likely be mild compared with disruptions in other retailing industries, particularly in the short to medium term,’ said Nathan Cloutman, IBISWorld Senior Industry Analyst.
The Australian supermarket industry in 2017-18
The Australian supermarkets and grocery industry is expected to generate revenue of AUD $108 billion in 2017-18 says IBISWorld. Online shopping represents an estimated 2.8 per cent of supermarket and grocery revenue, valued at AUD $3 billion.
While IBISWorld states that online grocery sales are growing, it is still only expected to account for 4.3 per cent of total supermarket and grocery sales 2022-23.
“Coles and Woolworths have the advantage of having many physical locations close to consumers,” Cloutman said.
“In addition, the major supermarkets already have the scale and logistical strength to expand their online capabilities through options such as click-and-collect.”
“Coles and Woolworths are increasingly expanding their online presence in anticipation of Amazon’s arrival. For example, Coles opened its first online-only dark store in inner-city Melbourne in June 2016 and IBISWorld expects more of these to be opened over the next five years,” he said.
Amazon may need to overcome some hurdles
IBISWorld said Amazon will need to overcome the established logistics and delivery networks of Coles and Woolworths, along with Aldi’s low prices to gain significant traction in the Australian grocery market.
“One year on from starting in the fiercely competitive British grocery sector, Amazon has yet to make its mark,’ Cloutman said.
“This is another positive sign for the major supermarkets in Australia.”
“However, Amazon could use their large purchasing power to acquire a grocery chain and establish an offline presence in Australia, similar to what they did with Whole Foods in the United States,’ concluded Cloutman.
No AmazonFresh for NZ anytime soon says IBISWorld
IBISWorld said due to New Zealand’s size, it was unlikely AmazonFresh would enter the country anytime soon.
The supermarkets, grocery, and convenience sector in New Zealand is expected to total NZD $18.7 billion for the 2017-18 New Zealand financial year, which is equivalent to approximately 17 per cent of the Australian industry.
- Amazonin chats with Australian suppliers says UBS
- What could Amazon’s acquisition of Whole Foods mean for Australia
- AmazonFresh signal of entry to Australia
- Conditions couldn’t be riper for Amazonarrival, Roy Morgan Research
- Woolworths prepares for Amazon grocery invasion
- Are the Amazons hunting the Aussie retail gorillas?
- Will the arrival of AmazonFresh really shake up Australia’s supermarket industry?
Rokeby Farms has launched a new probiotic milk called Filmjolk.
There has been much hype surrounding the now confirmed entry of AmazonFresh into Australia. But will...
The cold and flu season has begun and the importance of good nutrition when it comes to your immune ...
A fifth person has died after eating rockmelon contaminated with listeria.
Australian-owned energy drink Kanguru has announced it will launch into South Korea later this year...
Donut King is selling a new range of donuts designed to bring Australian adults back to their childh...
Happy little Vegemites are happy for a scientific reason Victoria University researchers have found.
SHOPPERS need to step up and shoulder some of the responsibility if Australia wants to rid its super...