Amazon confirms its retail offering is coming to Melbourne, with plans for a giant fulfilment centre

An Amazon Fulfilment Centre in the UK. (Photo by Jeff Spicer/Getty Images)

Amazon has confirmed it’s bringing its retail offering to Melbourne.

The company said the launch of its retail offering would involve “thousands of new jobs” and “millions of dollars of investment” through the opening of a fulfilment centre at Dandenong South on the outskirts of Australia’s second-largest city.

The facility will stock “hundreds of thousands of products”, the company said.

The 24,000 square metre centre is located in the Pellicano’s M2 Industry Park, providing easy access to the South Gippsland Highway, Monash Highway and Eastlink.

“This new fulfilment centre will stock hundreds of thousands of products which will be available for delivery to customers across Australia when we launch our retail offering,” says Robert Bruce, Amazon’s Director of Operations for Australia.

“We will be focusing on offering our Australian customers low prices on a great selection of products and can’t wait to get started.”

Rocco Braeuniger, currently director of consumables at Amazon Germany, will be the first country manager for Australia, an Amazon spokesman confirmed. Amazon has deep penetration of the market in Germany, holding about 25% of online sales, according to estimates by UBS.

Amazon is on a hiring spree with its jobs site showing 175 open positions in Australia.

Details of the launch of Amazon’s retail offering in the Australian market have been hotly anticipated by the industry and consumers alike.

Amazon’s sophisticated supply chain operations and its discounted pricing, combined with other offerings like its Prime subscription service which offers faster delivery, have wrought havoc on traditional retailers in other countries, most notably the US and Germany.

Its total annual revenue in 2016 was $US136 billion, or $A170.98 billion. Amazon famously reinvests every dollar in growth, ignoring profit to concentrate on building an ever expanding retail empire.

For comparison, the total annual food sales revenue for Australian supermarket giant Woolworths was $34.8 billion and total revenue of $60 billion.

Jeff Bezos was, for a brief moment this month, the world’s richest person with a net worth of $US90.9 billion after Amazon shares surged.

In April, Amazon confirmed its plans to bring its retail offering to Australia, promising to take on retailing in Australia with a “vast selection” and “fast delivery”.

It’s still unclear what products the company will be selling, although Morgan Stanley retail analyst Thomas Kierath expects it to start with books, then electronics, and then clothing.

Kierath estimates Amazon will take $12 billion of sales by 2026, and says the company’s arrival will have a “profound effect” on the retail industry.

Business Insider reported last month that the company was hiring for a range of roles that pointed to the establishment of a fulfilment centre — Amazon’s term for the giant warehouses from which it ships goods — in Dandenong South.

Amazon advertised for an operations manager in mid-June, to manage between three and seven “front-line supervisors”. The job description also required the employee to undertake “physical warehouse activities”, including “lifting and moving material up to 16 kilos each” and “standing and walking for up to 10-12 hours a day” in a building more than 400 metres long.

CEO of Amazon.com, Inc. Jeff Bezos. Photo: Getty Images.

Amazon also this week closed a deal for the exclusive UK rights to tennis’s ATP World Tour. This puts Amazon Prime Video in position to stream online a major sport which is usually watched on cable television. sports usually agreed to pay as much as £10 million ($13.2 million) a year for the rights.

In Australia, Foxtel says there’s nothing stopping Amazon from buying exclusive rights to an event like the Australian Open Tennis Tournament.

Amazon Web Services launched an Australian region in 2012 and Amazon launched a Kindle Store on Amazon.com.au in 2013. Amazon currently has almost 1,000 employees in Australia.

Here’s the announcement:

Amazon today announced that it will create hundreds of new jobs with the opening of its first Australian fulfilment centre in Dandenong South. Amazon will begin recruiting immediately for a range of roles, including operations managers, pickers, packers, systems technicians, and HR specialists.

Amazon recently announced its intention to bring a retail offering to Australia and the opening of this 24,000 square metre fulfilment centre is an integral early step in the move towards that goal.

“We are thrilled to be creating hundreds of new roles in Dandenong South,” said Robert Bruce, Amazon’s Director of Operations for Australia. “This is just the start. Over time, we will bring thousands of new jobs to Australia and millions of dollars of investment as well as opening up the opportunity for thousands of Australian businesses to sell at home and abroad through Amazon Marketplace.”

The new centre is located in the Pellicano’s M2 Industry Park in Dandenong South, providing easy access to the South Gippsland Highway, Monash Highway and Eastlink. The building is also in close proximity to a wide range of amenities for employees. The lease of the centre was facilitated by CBRE’s Industrial & Logistics business.

“This new fulfilment centre will stock hundreds of thousands of products which will be available for delivery to customers across Australia when we launch our retail offering,” said Robert Bruce. “We will be focusing on offering our Australian customers low prices on a great selection of products and can’t wait to get started.”

“Amazon is the latest global company to choose Victoria for its Australian operations,” said Wade Noonan, Industry Minister for Victoria. “The company’s decision to locate its centre in Dandenong South will create hundreds of local jobs and open up retail opportunities for thousands of local businesses.”

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