Amazon Australia launch: Startups poised to win from growing demand for retail, logistics tech
Wednesday, December 6, 2017/
Unless your home is round and rock-shaped, you’ve probably heard that online retail giant-monolith-destroyer-of-worlds Amazon has finally touched down in Australia, officially launching its local offering yesterday.
And while members of the small business and retail community have been bracing for the company’s arrival for months, many in the startup space are likely looking on with indifference.
Though perhaps some interest may exist at the prospect of a next-day-delivered pair of shoes for themselves, the business opportunities for disruptive startups aren’t immediately obvious as the orange dust settles. Amazon is widely considered a disrupter itself, and with low prices, speedy logistics, and hot-to-trot marketplace tech, there’s not much fat left for startups to chew.
But some founders say the retailer’s arrival will have an overall positive effect on the Australian startup ecosystem, believing that a rising tide lifts all boats.
One such founder is William On, half of the brainpower behind Sydney-based shipping and logistics startup Shippit, which closed a $2.2 million funding round earlier this year. Shippit aims to eliminate “sorry we missed you” scenarios, offering simple shipping for retailers backed up by GPS tracking and notifications.
Speaking to StartupSmart, On says the past three months leading up to Amazon’s launch has been “brilliant” for the startup, as many Australian retailers began to focus on the “last mile” battleground, as On calls it.
“Traditionally e-commerce in Australia has been about great products with beautiful websites, and when it came to shipping, that was being neglected,” he says.
“But shipping is a big part of Amazon’s value proposition, so Australian retailers have started to wake up.”
From October to November, Shippit’s shipping volume jumped more than 30%, says On, as other Aussie retailers became desperate to match Amazon’s offerings (though it appears many big-name retailers were already on par with the US company’s shipping options).
The startup is now working with a number of clothing retailers, including Cue and General Pants, to help them use their stores as “mini-warehouses” to ship products to customers in metropolitan areas on the same day.
But even for broader opportunities for startups outside of the shipping and logistics space, On is still optimistic. He says Amazon’s arrival is “awesome” for the Australian startup ecosystem, both for companies looking to compete against the retailer and those hoping to complement its offerings.
“From the complementary services perspective, as other companies plug into Amazon’s marketplace, services like inventory management and warehouse management software will become even more important, and that will increase the tech uptake,” he says.
“And Amazon’s competitors will be looking at new tech to help them get ahead, like augmented and virtual reality to help drive foot traffic. There’s a good play to be made from retail-focused startups in these areas.
“We’re going to see a general want for retail tech.”
On isn’t the only one in the startup space who’s confident in the rising tide effect of Amazon. James Chin Moody, founder of parcel delivery startup Sendle, tells StartupSmart the retailer’s arrival “spells opportunity” for startups and small businesses.
“Amazon will connect more consumers with online retailers than ever before — up to 50% of Australians have said that they are more likely to shop online now that Amazon is here,” he says.
“Startups who have a unique product that they can get to their new customers with the best end-to-end service, without making them line up at the post office, will take advantage of this shift, and will experience growth.”