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eBay Oz: Local Retailers Don’t Trust Amazon, Could Undermine Them

According to eBay Australia’s Managing Director, Tim Mackinnon, Australian retailers do not trust American e-commerce behemoth Amazon, for fears it may use its own sales data to undermine them.

Appointed last week as Managing Director of eBay Australia & New Zealand, Mr Mackinnon states:

“What I hear from Australian retailers, and I talk to a lot of Australian sellers, is they worry about the effect that Amazon might have on their business”

“While some of them are considering selling on Amazon, they don’t completely trust Amazon. They worry about the way that Amazon might use their sales history and buy items themselves”.

Amazon’s business model not only allows third-party retailers to sell through its virtual marketplace, but also sells a variety of products itself.

Citi analysts forecast that Amazon will commence trading out of its Melbourne fulfilment centre before Novemeber 24th – a move which will go down as one of Australia’s most notable retail disruptions.

By comparison, Mackinnon has promoted eBay as a champion of local businesses, by stating the platform is a “pure marketplace” where the seller with the best price and service will win.

Mr Mackinnon remarks that eBay affords retailers and sellers control:

“We don’t seek to own and control the Australian retail landscape – we seek to enable it. Ninety per cent of the small businesses on the platform export around the world; offline it’s only 5 per cent”

“We have legitimately played a key role in incubating a number of entrepreneurs in this market, growing tens of thousands of small businesses and we’ll continue to do that”.

Morgan Stanley analysts predict that Amazon will “take a significant portion of eBay’s business in Australia”, and that local retailers will have to reduce prices by about 10% in order to stay competitive post-Amazon.

However, Mr Mackinnon believes eBay and the retailers that use the site would still remain competitive, even if Amazon dropped prices.

“We’re confident that Australian retailers will continue to be competitive and that Australians will continue to want to connect with Australian retailers”

“Australians prefer to buy from a local retailer, they prefer to buy from small businesses”.

Thus far, 80 of Australia’s top retailers hold a place on eBay, comprising part of the 40,000 Australian businesses which trade on the platform. The company has not disclosed the value of transactions passed through its Australian site, though in 2016 the global amount was $104 billion globally, posting a company revenue of $9 billion.

eBay Australia’s website has doubled in visits to 11 million a month over the past six years, with three of five Australian online consumers stating they had bought from the site in the past year.

Reports state eBay was exploring establishing partnerships with Australian warehouse providers, on behalf of eBay sellers. Mackinnon states that similar partnerships where eBay has negotiated better rates and delivery option integration has been successful in other markets.

Mackinnon is currently working with the Australian government and ATO, after eBay received heat over its corporate structure and how much tax it pays in Australia.

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