Retail in Asia

In Shops

Amazon’s small stores on their way to Australia


One of the world’s biggest retailers, Amazon, is on track to launch bricks and mortar grocery stores and an online supermarket in Australia within two years.

It would be smaller than a Woolworths or Coles; similar in size to an Aldi store. It would stock only the items people like to inspect before purchasing, namely fruit and vegetables, meat, dairy and alcohol.

But customers would still be able to buys tens of thousands of products through an app or an instore kiosk or touchscreen. These products would not be stocked on shelves. Instead, they would be stored in nearby fulfillment centres, for delivery to the customer’s home.

SEE ALSO: Amazon is coming to Australia in 2017

Customers would also have the option of ordering groceries online and then using drive. This “multi-function” store design would increase sales per square metre — an important metric for retailers.

The online giant has identified grocery as a growth opportunity and is expected to launch its grocery business in Singapore and South East Asia around the same time as launching in Australia.

When the retail giant is comfortable with its technology, distribution network and supplier deals, Amazon is then expected to launch Amazon Fresh, its online grocery delivery service that recently launched in the UK.

An report by Citi’s Australian retail analysts estimated Amazon could generate between $3.5 billion and $4 billion in Australian sales within five years of launching, assuming an entry within two years. “This would be about 14 per cent of online retailing and 1.1 per cent of all retail sales in Australia (including food),” they said.