Retailers brace for the arrival of Amazon

Amazon's distribution centres arriving in Australia could hurt local retailers. Photo / supplied

The arrival of online giant Amazon in Australia may bring some benefits to New Zealand companies, but many will be nervous say retail commentators.

The US online business has planned to open distribution centres in capital cities across Australia next year, allowing faster delivery and pick-ups for its local customers.

Analysts are predicting the arrival could hurt a number of retailers including JB Hi-Fi, Harvey Norman, department stores including Myers, and supermarkets - with Amazon saying it would be expanding into fresh food.

Although the move may be hurt retailers in Australia, there could be some benefits for New Zealand retailers according to First Retail managing director Chris Wilkinson.

"Amazon can be more agile in this market which is going to make a big difference," Wilkinson said.

"I think there will be a lot of retailers that probably will look towards Amazon for fulfillment and will want to be part of that supply chain."

"It's probably a question of wanting to jump in and leverage their strength and reach so it could be quite good for some businesses."

Retail NZ public affairs general manager Greg Harford said while the distribution centres could provide a channel to market, particularly for smaller retailers, the short-term impact was likely to be negative.

"I think on balance there are opportunities with Amazon for Kiwi retailers but in the short term it's probably more the negative," Harford said.

"It's certainly a real concern for many of our members because Amazon is obviously a massive global giant which is already servicing New Zealand customers and taking advantage of the fact that it doesn't have to pay GST to the government on things it is selling to New Zealanders," he said.

"The stories we've heard are things like Amazon people being quoted as saying they're going to destroy Australian retail effectively by undercutting retailers and I think New Zealand retailers are concerned that they will be able to do that here too."

Wilkinson said there had been talk for a while around whether Amazon would set up centres in Australia or Asia, saying similar businesses had often set up centres speculatively.

He said often big warehouses were set up ahead of where they saw demand which was what Amazon appeared to be doing.

In the US, Amazon takes one dollar for every two dollars of online sales.

What's more astounding is that by some estimates e-commerce will hit 20 per cent of total sales in a decade's time - which will mean that Amazon will account for 10 per cent of total retail sales in the US.