The acquisition that stunted Amazon’s growth Down Under


Australian Made and eBay have joined forces in response to growing demand for local products.

When Amazon first announced the intention to build dedicated Australian infrastructure to support the brand Down Under, I immediately believed this would lead to a significant increase in sales via this new offering.

New offering, not new brand.

Amazon has been a trusted brand for Australian and New Zealand (ANZ) shoppers for a decade and a half, and a huge player in the technical support of big ANZ businesses and government departments via its Amazon Web Services (AWS). 

Amazon is a huge brand in the minds of ANZ shoppers. And a little tiny rounding error for Amazon’s global business.

That’s not a pejorative comment; it’s a fact for all US-owned ANZ businesses. It’s simply not possible to be hugely relevant in a board room meeting when the US has 330 million of the world’s wealthiest shoppers. We in Australia have 25 million, or the population of Texas with fewer billionaires if you will.

However, that aside, when any large US company puts their collective minds and capital into any market we expect to see significant growth.

But a year in and it feels like Amazon hasn’t yet hit its straps.


Well a big part of me believes it is because the company that was built on garage sales, eBay, has morphed into a two-brand garage sale and business-to-shopper marketplace very successfully. Backtracking to May 2005, Gumtree was bought by eBay, the latter of which states it paid a total of  US$81 million ($121 million) for three “classified” websites (media speak for physical publications and websites that allow shoppers to sell stuff to shoppers).

Gumtree was started in London as a little website that allowed Aussies, Kiwis and South Africans arriving in or leaving London to sell stuff to each other. Hence the name. Basically where eBay started in the US but without the tri-nation focus. 

Gumtree is now the top classified site in the UK and ANZ.

What that did was allow eBay to leave behind the ‘garage sale’ in the capable hands of the Gumtree brand and team, and move upwards in volume and value to the online marketplace model, connecting brand owners and marketplace suppliers with shoppers. This model allows a much wider and more consistent range of higher value, new items to be offered by trading companies to individual shoppers.

I can clear my garage once every few years, but a company can design and source a wide range of new items and pay to market them to shoppers 24/7.

This is where Amazon came of age, morphing out of books into a marketplace, and then later selling Amazon’s own items and brands via that much larger marketplace.

However, in ANZ, eBay beat them to that spot, and it is proving very difficult to take share back from online shoppers and aligned marketplace suppliers. 

This holiday season will need to be a cracker for Amazon to take share. Expect to see a huge Amazon presence and spend in old-school media, free-to-air television, print, radio and even branded human beings in shopping malls and public spaces to allow this born-digital brand to connect with the 80% of mainstream human shoppers needed for this business to gain scale in ANZ. 

So, what if Amazon doesn’t gain scale in ANZ?

Well, they have more shoppers than people in our country and more capital than our government. I exaggerate for effect, but poor they ain’t. They can trade on for years without making money.

However, I do believe it will trigger a conversation in the board room about investment in infrastructure.

Amazon is getting fatter every quarter as its overhead grows. Soon it may be as fat as a big old physical retailer. Then it will have little ability to differentiate on price.

Happy holidays.

NOW READ: Amazon Australia grows revenue more than 1500% but remains a “small proportion” of the retail market

NOW READ: Amazon Australia refuses to reveal emissions data, claiming “trade secrets”


Notify of
1 Comment
Newest Most Voted
Inline Feedbacks
View all comments
2 years ago

I agree about Gumtree / ebay but Amazon can still make huge inroads if it keeps the cost of Amazon Prime membership at the current AUD $59 / year. Music, reading, movies and tv shows to stream PLUS free postage and returns is a tough proposition to beat. ebay Plus is just not as comprehensive an offer plus it is not as compelling as it is a platform where ‘free postage’ (or low cost postage) had become the norm.

ebay often still wins my purchase as it very frequently offers 5%, 10% and 20% discount codes – the best of which can be applied on purchases across ebay. After all, the goal is to purchase what you need or want in the most convenient way at the very best price you can find.

Amazon won’t dethrone ebay unless/until they sell more as Amazon and focus less on the ‘marketplace’ aspect of their business. I don’t feel as confident buying on Amazon if I think there could be any type of issue with authenticity or warranty with a purchase. I know I can count on ebay to fix an issue with a third party seller – I don’t have that confidence with At least, not yet.

That said, ebay’s Global Shipping program is absolutely abysmal and a potential Achilles heel – it is hugely expensive and is often the reason I don’t go through with a purchase on that platform. On the other hand, order $49+ from the US Amazon site and the shipping is free for most items. The only thing Amazon needs to add is to extend that to the Amazon UK site so Aussies can get the same great service and shipping for UK items that some times better meet our needs than the USA version.

SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Forgot your password?

Want some assistance?

Contact us on: or call the hotline: +61 (03) 8623 9900.