Retail shares took a beating on the Australian market today.
Leading the fall was home electronics and appliance retailer Harvey Norman, down 8.2% to $4.36.
CommSec noted that a broker had named a group of Australian retailers with the most to lose from Amazon’s entry into Australia.
At the close, JB Hi-Fi was down 2.8% to $23.99, Myer 3% to $1.10, Super Retail 3.3% to $10.34 and Kathmandu 1.39% to $1.77.
Research by Credit Suisse shows Amazon will likely reach a better than 5% market share in many retail categories within five years of arriving in Australia.
The note by analysts to clients shows Myer at the highest risk followed by Harvey Norman, JB Hi-Fi and Super Retail Group.
Among ASX-listed retailers, Myer could be hit the hardest.
Credit Suisse estimates the 117-year-old department store chain faces sales revenue falling by 4% to $3.16 billion in the 2022 financial year, compared with 2016, and EBIT falling 29% to $81 million.
Amazon customers have high engagement with electrical, home, sporting goods, clothing and children’s toys.
“Almost anything that can be put in a small box is likely to be vulnerable to Amazon,” the analysts say.
The success of Ruslan Kogan’s online retail business Kogan.com could be a precursor to the US giant’s inroads with Credit Suisse saying prices for private-label electrical accessories in JB Hi-Fi appear to be high and Kogan’s prices are similar to Amazon US and UK.
In Australia, online shopping accounts for 16% of spending on consumer electronics and electrical appliances. And about 90% of online sales are captured by local domestic online retailers including Appliances Online, Kogan, JB Hi-Fi and Harvey Norman.
That helps cushion Harvey Norman. The impact of Amazon is mitigated by Harvey Norman’s bulky product range and its business outside of Australia.