Amazon faces a backlash from Australian consumers after stopping online shoppers from importing products from its overseas e-commerce sites when the new goods and services tax regime comes into effect in July.
From July 1, when the GST will apply to overseas purchases under $1000, Australians shopping on Amazon overseas sites such as amazon.com and amazon.co.uk will be redirected to the Australian site, Amazon.com.au, which currently offers about 60 million products across 23 categories including books, toys, fashion, beauty, homewares and electronics.
Amazon will no longer ship from its overseas sites to addresses in Australia.
Amazon has established a ‘global store’ option on its Australian site offering more than four million products that were previously only accessible from amazon.com and will collect and remit the 10 per cent GST on these sales.
However, the global store will offer a fraction of the 480 million products currently available on amazon.com.
The only way Australian consumers will be able to shop on Amazon’s US and UK sites is to have orders sent to an address in the US or UK or use an online freight forwarding service.
Amazon announced the move on Thursday, saying that as a result of changes to Australian GST laws on July 1, international shopping options for Australian customers would change.
“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites,” Amazon said.
“Based on our assessment, we will redirect Australian customers from our international sites to amazon.com.au where they can shop for products sold by Amazon US on the new global store, available today.”
“This will allow us to provide our customers with continued access to international selection and remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas.”
The move will affect millions of Australian consumers who shop regularly on Amazon’s overseas sites to access a vastly wider range of products and cheaper prices than those available on amazon.com.au, which was relaunched in December.
Last year, Citigroup estimated Australians were spending between $500 million and $700 million on all Amazon websites, representing about 10 per cent of all overseas online spending. This was before the relaunch of Amazon.com.au.
According to Nielsen data, 6.9 million adult Australians visited Amazon sites in December, up from 6 million in November and 4.5 million in October.
This included about 3.8 million Australians who accessed amazon.com.au that month. In comparison, about 1.04 million Australians visited amazon.com.au in December 2016, when the site only sold Kindle readers and e-books.
Analysts said if Amazon’s move was executed well it could boost traffic and sales on Amazon.com.au ahead of the launch of Amazon Prime.
However, the move may also be a blessing for local online and bricks and mortar retailers if shoppers who can no longer order from the US or the UK start shopping locally.
Australians spend about $25 billion a year online, with about $6 billion spent on overseas e-commerce sites.
GST currently applies only to items bought from overseas retailers and worth more than $1000.
The government estimates the new GST laws will raise about $300 million a year, but online retailers including Amazon, eBay and asos warned last year the plan was “unworkable” and could lead to them blocking Australian buyers.
In a submission to the Productivity Commission last year, Amazon argued for a “modernised transporter model” that would see logistics companies such as Australia Post, DHL and FedEx collect the tax on parcels they delivered instead of vendors such as itself and eBay.
This appeared at the AFR.com. See the original here.
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