Australian retail billionaire Gerry Harvey says the Australian retail sector shouldn’t worry about Amazon just yet because it will take much longer to establish itself locally than what some believe.
In March, a former Amazon retail executive said the internet giant would be fully operational in Australia by the end of 2018.
Harvey thinks this is a stretch.
“Amazon to my knowledge haven’t even bought a block of land in Australia,” he told Fairfax Media, adding that after it buys the land it could still take up to three years before anything is likely to happen, and even “that’s very quick”.
Harvey, executive chairman of Harvey Norman, the whitegoods business he co-founded in 1982, says he bought land in Queensland for $18 million almost a year ago. Despite that he only settled six months ago and I’m still trying to get council approval for work on the site.
He also says if its model is going to be successful in Australia it will need 50 warehouses.
“Start with two – one in Sydney and one in Melbourne – and then it’s how do you deliver? That’s the best-case scenario,” he said.
“I know how long it takes.”
In April, the US online retail giant said it was actively looking for a warehouse to become a fulfillment centre with floor space of up to 93,000 square metres, or about five MCGs.
A decision hadn’t been made on a location but it is likely in either Brisbane, Sydney or Melbourne.
It will also start hiring to add hundreds more to the 1000 employees already in Australia.
The company already does $1 billion in sales in Australia by shipping from overseas, according to analysis by Morgan Stanley — a small portion compared with the $300 billion in total annual retail sales in Australia.
Harvey Norman $1.8 billion, Bunnings has $11.5 billion in revenue, and JB Hi-Fi $3.9 billion. All three sell goods with a long shelf life, the type of products now in Amazon’s sights in Australia.
The Sydney Morning Herald has more.
Additional reporting by Chris Pash.