Online giant Amazon divides shoppers Down Under

Amazon’s Australian launch has polarised online shoppers, with some calling the much-hyped launch an “overpriced” disappointment.

The e-commerce giant activated its full-service local offering today, featuring its own products and items sold by about 600 local retailers, after selling popular Kindle e-readers for months.

Offering "millions of products" through a nationwide service, customers can access free delivery on orders above $49.

"It's like an online shopping mall, that's the best way to describe it," Nine's Finance Editor Ross Greenwood told the TODAY Show.

The formula has worked in the US and Europe, with the company making A$178,961,611 in total earnings last year alone.

Co-founder Jeff Bezos is now the world’s richest man, with an estimated net worth of A$128.54 billion.

However, despite the fanfare over Amazon’s Aussie store in Dandenong, Victoria, which began rolling out last month, some shoppers have expressed disappointment over prices.

“Nothing on Amazon Australia is cheaper than we’re used to. Nothing,” Twitter user Josh Brynes wrote.

NewsCorp technology editor, Jen Dudley-Nicholson, said she wasn’t as “awestruck” by the site as she initially expected.

“It’s so bizarrely overpriced I’m going to bed,” Dudley-Nicholson tweeted.

She noted that many products offered by the same seller had higher prices on Amazon.

How Amazon’s prices compare to other popular retailers*

Household essentials

Finish Powerball Max in 1 Dishwasher Tablets Lemon 72 pack

Amazon: $23.44

Woolworths: $30.24

Dettol Liquid Hand Wash Refreshing Lemon Lime Anti-Bacterial Pump 250ml

Amazon: $2.54

Woolworths: $2.00

Harpic Fresh Power Toilet Cleaner Liquid Summer Breeze 700ml

Amazon: $4.19

Coles: $2.50

Electronics

Nikon DSLR Camera D5300 18-55mm VR Lens Kit Black DSLR Camera

Amazon: $593.95

Dick Smith: $689

Sennheiser PXC 550 Wireless Headphones

Amazon: $399

JB Hi-Fi: $399

Beauty

L'Oréal Paris True Match Foundation

Amazon: $26.88

Priceline: $29.95

Palmolive Naturals Shampoo

Amazon: $4.21

Chemist Warehouse: $2.99

Office supplies

Sharpie Permanent Markets, Fine Point, Assorted Colours, 8 pack

Amazon: $7.76

Officeworks: $14.40

Canon CLI42 Black Ink (Genuine)

Amazon: $21.70

Cartridge World: $27.10

Toys

Mattel Games Scrabble Aussie Game

Amazon: $16.97

Toys “R” Us: $39.99

LEGO Friends Heartlake Surf Shop

Amazon: $20.00

Big W: $20.00

The US retailer is known for sacrificing profit for sales through aggressively low prices and its greater presence in Australia is expected to benefit customers but bring more pain for local retailers.

Next year the brand’s streaming service Amazon Prime will launch, in a bid to further integrate the brand into the homes of Aussies.

Brian Walker, CEO Retailer Doctor Group, said Amazon will force other stores to sharpen their game.

“It’s really sending a strong signal…general retailers are in the gun barrel of Amazon,” Mr Walker said.

But he added that competitors will be ready to fight back, creating better prices for buyers.

“Don’t just play with one player.”

Greenwood also advised that shoppers should still check out other stores before checking out their online shopping cart.

"Before you jump into Amazon, just check with retailers that are out there, most of the bricks and mortar offer many significant discounts off the recommended retail price as well," he said.

Executive director of the Australian Retailers Association (ARA), Russell Zimmerman, said that Amazon was a “great opportunity” for local retailers, with online market sales accounting for more than seven percent of sales.

“With over 300 million active users already on Amazon’s Marketplace, the majority of Australian retailers view Amazon’s platform as a supplementary channel to their current retail offering,” Mr Zimmerman said.

“We encourage retailers across Australia to embrace change, and meet the demands of both consumers and the 24-hour market place,” he added.

Retail analysts at Citi believe large local electronics retailers JB Hi-Fi and Harvey Norman will be among the hardest hit by the disruption the global behemoth is expected to create.

Morgan Stanley analysts have previously warned that Kmart and Target's parent company Wesfarmers could lose $400 million in annual earnings to Amazon by the 2026 financial year.

In November, Amazon had notified its sellers that it would begin an internal testing phase with a small number of customers.

*Prices on 5/12/2017