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AmazonFresh poised to shake up Australia’s online grocery marketplace


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Competition could stimulate new public interest.

Competition is on the way for Australia's supermarkets. Following much speculation, e-commerce giant Amazon officially confirmed late last month that it would soon be expanding its presence in Australia.

Anticipation among the public for Amazon's Australia launch has been enormous, but some Australian small business owners are concerned the e-commerce giant's presence may be damaging to their endeavours, while others are more optimistic and excited about the incoming competition.

So how does this affect local supermarket operators? Amazon's expansion plans include the launch of Amazon Prime and its grocery range, AmazonFresh.

AmazonFresh, which currently operates across parts of the US, is a grocery delivery service that will compete directly with Australia's biggest supermarket chains in the online retail marketplace.

However, despite positive public sentiment, the number of people shopping for groceries online remains a modest demographic in Australia. Less than 30% of Aussies would consider buying groceries online in the next 12 months, while just 3.1% actually do in any given four-week period.

Roy Morgan Research reports Woolworths has enlisted a task force to address the threat of Amazon's entry into the online retail space, as its customers are slightly more likely to shop online (4.2% in an average four-week period) than those who predominantly shop at Coles (4%), ALDI (1.4%) or IGA (1.2%).

The research also shows grocery buyers who mainly shop at Coles are more likely to consider doing some grocery shopping online in the next 12 months (32.1%) than those who generally shop at Woolworths (30.6%), ALDI (28.5%) or IGA (19.6%).

As part of his regular Findings column, editor-in-chief Angus Kidman recently preferred that any Australian businesses panicking about Amazon's entry only have themselves to blame.

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