Amazon’s international expansion strategy is an open secret. The company went after one large economy after the other in a very orderly fashion, and is now present in all the top ten economies of the world – and a few more. Amazon is well on its way to establishing its operations in Australia, and there is one big factor that is going to guarantee their success in the country.
“Amazon’s plans for Australia are bigger than first thought.” – Business Insider
Australia is the twelfth largest economy in the world, according to the World Bank’s 2015 GDP numbers, with a population of 24 million spread across nearly 3 million square miles. It’s a huge country and holds the sixth position in the world in terms of landmass, but the advantage for Amazon is the way the population is distributed across the country.
Here are some 2015 population statistics of top cities in Australia from McCrindle:
Sydney = 4.9 million
Melbourne = 4.5 million
Brisbane = 2.3 million
Perth = 2.1 million
Adelaide = 1.3 million
Of the 24 million people living in the country (as of 2015), nearly 15.1 million – or about 63% of the total population – is living in five cities; and the major portion of the country’s population is living in a narrow coastal strip stretching from Brisbane to Adelaide.
“Most of Australia’s population is concentrated in two widely separated coastal regions – the south-east and east, and the south-west. Of the two regions, the south-east and east is by far the largest in area and population. The population within these regions is concentrated in urban centres, particularly the capital cities” – Australian Bureau of Statistics
This clustering of the population is a huge advantage for any e-commerce company, and certainly for a company like Amazon, which has built up massive expertise moving goods across the length and breadth of the United States. Just by concentrating on five cities, Amazon will be able to serve more than half of Australia’s population.
Australia’s tech penetration is one of the highest in the world, with 85% of the population having Internet access and 77% owning a smartphone. And let’s not forget that it is the twelfth largest economy in the world.
If Amazon had a checklist of “things a country should have for us to dominate it,” Australia will most certainly check most of the boxes on that list.
Wonder why Amazon took so much time to dive deep into Australia?
Anyway, we predict Amazon to run away with the market within the next few years, and watch out for fulfillment clusters across Australian cities because that’s the key to a strong logistical presence.
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