But other analysts said it was not all bad news for local retailers, with Amazon expected to face similar challenges such as low access to broadband and the large size of the island continent.
"By concentrating on providing a great shopping experience and by constantly innovating on behalf of customers, we hope to earn the trust and the custom of Australian shoppers in the years to come", Braeuniger said.
Australians have known Amazon would one day open its electronic doors since April but there was no indication of exactly when it would happen. Amazon said it already has more than 1000 employees in Australia across offices in Sydney, Melbourne, Perth, Brisbane and Canberra. Still, it's a huge blow to our $16 billion retail sector.
Retail categories most likely to be hurt by Amazon's entry include electrical, appliances, apparel and cosmetics, UBS added.
"My main take away [from meeting United States retailers] was that Amazon's key advantage is that its strategy is driven by data, not gut feel, and the key source of this data is the Marketplace".
The American giant is offering "millions" of products from well-known Australian brands, as well as small and medium-sized Australian businesses selling on Amazon Marketplace.
So despite predictions of rock-bottom prices, shoppers should still be wary of the total cost for AmazonAustralia products after delivery fees are added on. "I think this may prove hard".
"Amazon has done well in the USA and United Kingdom against inefficient players, but efficient bricks-and-mortar retailers can compete if they can use their existing scale and supply chain to lower "last-mile" delivery costs and time". Many products will ship out of a Melbourne-based warehouse the company began setting up months ago. A Lenoxx 9-inch Twin Screen Portable DVD player, which retails for $149 on Kogan.com, is $172.38 plus $9.45 delivery on Amazon.
Over time, we will create thousands of new jobs and invest hundreds of millions of dollars in Australia.
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