Amazon is set to construct a new “fulfillment centre” in Melbourne, run by advanced robots, due to a total Australian investment of $8.4 billion to date.
Hoping for completion in 2025, the site will be at the AustralianSuper owned Craigieburn Logistics Estate, in northern Melbourne, and is set to house 25 million smaller items sold on Amazon.com.au.
The site is expected to cover around 209,000sqm over four levels, five times the size of Melbourne’s Federation Square, becoming the largest warehouse ever built in Australia, and will be larger than the western Sydney site by 9,000sqm.
This will be the seventh Australian Amazon site, following the success of the first launched robotic site last year, doubling the company’s operational local footprint.
Once it has become fully operational, it’s expected to create around 2,000 local jobs, and take Australian staff size to around 9,000.
This investment is the latest underlining the growing threat Amazon has posed to local Aussie retailers since it first set up here in 2017, offering over 200 million products, across 31 categories, with growing numbers of Aussies signing up to Amazon Prime delivery and streaming service.
Analyst Ben Gilbert said in May that investors are underestimating the impact US online retail, especially this giant, has in Australia, with plans to grown its market volumes by over $5 billion. He noted Amazon’s volumes would be close to $5 billion this year, which is up 25%, and was expected to rise by over $5.5 billion by next year.
He expects the growing digital presence, rising penetration of the Prime platform, and the same day delivery pledge is set to drain rival retailers of sales, customers, and profits.
The construction of the second robot centre is set to increase its speed and service, equipped with advanced robotic technology assisting employees serve customers.
Janet Menzies, Amazon Australia country manager, claimed the investment highlight the importance of the Australian market to the giant.
“We are making a significant investment in Victoria. It really says that Australia is a very important market for Amazon and we’re really buoyed by the consumer reaction to our offer. Just very excited about the opportunity this will create for new jobs.”
“This will help the small businesses that are so much an important part of our offer, and also what this will mean, of course, for customers.”
She said once the centre was completed, it would become the largest warehouse in the southern hemisphere, and despite tough economic conditions due to rising interest rates and rents, shoppers were reacting positively and its online marketplace keeps growing.
“We really are proud of how customers are reacting to the offering. You know, for us, it’s all about having a really wide selection that’s underpinned by the small businesses that are on the site.”
“It’s about competitive pricing. It’s about fast delivery. And so for us we are very optimistic about Australia; we’ve doubled our operational footprint since the start of last year and so for us this is really about continuing to invest to make sure we have the fulfilment network that can serve our customers.”
She revealed ‘Prime Day’ was the biggest sales day ever in Australia for the company, taking place in July.
“That is an important signal from customers that they are responding well to the offer.”
During that last few years, Amazon has almost doubled in Australian sales, racing to annual revenues of $3 billion, as a rebound from the pandemic, and a boost in popularity from Amazon Prime subscriptions.
Accounts by Amazon Commercial Services, showed 2022 had revenue of $2.629 billion, up from $1.75 billion in 2021.
