Amazon Australia has taken a much-anticipated step into pantries, launching 400 pages of food and grocery products on its local platform.
Launched on Wednesday, the e-commerce giant has teamed up with hundreds of domestic and international brands to kickstart the offer, including Carman’s, Arnott’s and T2 Tea.
Unlike its initial Australian launch last December, which fell short of expectations, Amazon appears to be trying to make a splash with its new food and grocery section, launching with a wide range and sharp prices.
It is selling a six-pack of Carman’s dark chocolate muesli bars for $3.90, 35% cheaper than $5.60 Woolworths was offering online on Wednesday morning.
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A sweetener has also been offered to early movers, with those buying before November 8 set to receive 25% off their first order.
Other products such as Arnott’s pizza shapes and Mount Franklin water were comparable to Woolworths’ online store on Wednesday morning.
It’s only been a few hours since the offer went live, but Carman’s founder Carolyn Creswell says she’s not sure whether stock will last the day.
“It’s been going crazy,” Creswell tells SmartCompany.
“Our inventory guys are saying we’re not going to last the day.”
Creswell doesn’t believe expanding Carman’s online business will cause in-store sales to suffer, saying the launch was about appealing to different customers and types of shopping.
“It’s a very blurred line, people can’t shop online exclusively and will still go into the supermarket,” she says.
“[But] when you’re running out of something you’ll be able to replenish a lot more broadly and easily.”
Amazon has on-boarded 45 of Carman’s products and appears to be investing in price out of its own pocket, a move that retail expert Pippa Kulmar says is designed to get people onto the platform.
“They’ve lowered prices or made it very competitive to get people to try it,” she tells SmartCompany.
“They’re loss leaders to get people on the site and into [Amazon] Prime.”
Coles and Woolworths have longstanding online grocery platforms, but only a small portion of Australians currently buy their food online.
Nielsen research from earlier this year found 403,000 new households bought groceries online in 2017 but was still only 3% of total trade in the sector.
Kulmar says Amazon weighing into the market will increase market penetration, predicting a fresh-food offer isn’t too far away.
Amazon has yet to signal any imminent launch of a local fresh-food offer, but its Amazon Fresh service has been successful overseas.
Amazon Australia’s country manager Rocco Braeuniger kept quiet about the possibility of Amazon Fresh on Wednesday.
“We have been focused on growing selection and services for Australian customers,” he said in a statement.
“Today we are delighted to add to the over 80 million products already available on the store with the launch of Pantry Food and Drinks, bringing greater convenience to customers, underscored by everyday brilliant value and fast delivery.”
The launch of pantry is just the latest expansion from Amazon in Australia, following the opening of its pet supply, travel store, automotive and jewellery categories last month.