Amazon has confirmed that it will enter the market in Australia. At the same time it is set to launch Amazon Pantry in Switzerland. The market entry to Australia was confirmed in a short statement from Amazon, ending long running speculation that a move was imminent. The online giant, which launched AWS in Australia in 2012 and a Kindle store in 2013, said “the next step is to bring a retail offering to Australia, and we are making those plans now.” According to the Sydney Morning Herald, a first distribution centre of around 93,000 sq m in Brisbane, Sydney or Melbourne is being actively sought in order to start operations. Earlier this month Amazon entered the market in the Middle East through its acquisition of Souq.com.
Meanwhile, Amazon is expanding its services in other markets as well. In Switzerland the company is set to launch Amazon Pantry, Handelszeitung reports. Pantry allows Prime members to fill a 110 litre box with ambient grocery and household items in individual sizes and have these shipped to home. This service already launched in Germany and the UK last year. Former Aldi Switzerland executive Patrick Lobsiger leads the Amazon Pantry service for Germany, Austria and Switzerland.
With a market entry to Australia following hot on the heels of the Souq.com acquisition in the Middle East, Amazon is capitalising on opportunities to further internationalise and expand its business. At the same time it is demonstrating itself to be serious about grocery as a category and ramping up its focus in key markets –growing its market share with the rollout of newer concepts such as Amazon Prime Now, Fresh and Pantry.
Amazon has held a long-term goal of generating more than 50% of revenue from its overseas markets, yet 66% of its retail turnover for 2016 was generated in North America. This compares to 61.4% in 2014 and demonstrates how highly dependent the company remains on its domestic market – and the importance of internationalisation. With the Australian market entry and Middle East acquisition, Amazon evidently sees opportunities to build its business as e-commerce spreads to new geographies.
In Switzerland the introduction of Amazon Pantry signals that the retailer is ramping its focus within the grocery category, as it is in other markets, to drive volume and frequency among its loyal Prime subscribers. Although a small market, online grocery is already well established in Switzerland with retailers such as LeShop.ch and shoppers are likely to be receptive to new grocery additions from Amazon.