New OZ Post Boss Talks About Amazon Arrival
As we exclusively tipped back in May Australia Post has confirmed that they are close to getting into bed with Amazon.
New chief executive Christine Holgate has confirmed the mail carrier is in advanced talks with the big US online site, she claims that the arrival of Amazon presents an opportunity for the Federal Government owned business to grow. She is also keen to work with existing retailers who face having $10 billion wiped from their sales.
“Clearly, it’s both [a threat and opportunity],” Ms Holgate told The Australian Financial Review when asked about Amazon’s entry.
“You have to have a multi-level strategy. I think Australia Post can be a very powerful partner to Amazon, but I think we can also be a very powerful partner to the major retail players in Australia as they go through their transformation, so it’s not anti-Amazon, it’s a balanced approach,” Ms Holgate said on Tuesday, her second day on the job.
“We also have some very good, powerful retailers here and they are not going to just die. All of us Australians need Coles and Woolworths and Metcash to remain strong, they touch so many different parts of your pocket, we want them to be strong and healthy and we want people to have choice, so I think we can be both.”
“In an Amazon world, if you look at the UK they went in and in just three years they took $5 billion [pound] sterling in just three years, so that’s $10 billion Aussie, so you can understand why the retailers here would be nervous,” Ms Holgate said.
The former Blackmores CEO said she would try to learn the lessons of both Canada and the UK in dealing with Amazon’s entry.
“If you look at Canada [Post], they have partnered with Amazon and it appears to be a good, healthy situation and it appears to have similarities with Australia with its huge geographical landscape, people are dispersed and who else has the network to touch every home and business. Australia Post’s scale and touch is really valuable, and they have built a very good, long-term relationship [with Amazon].”
However, Ms Holgate said Australia Post, which returned to a $95 million profit this year after a $222 million loss in 2015, they don’t want to spend too much on infrastructure for Amazon’s benefit and be left with legacy infrastructure.
“Amazon had launched in the UK and were a massive partner with the Royal Mail, they are still a big partner but are nowhere near as big a partner as they were then. Royal Mail built a lot of infrastructure to enable that service for Amazon so as a business we have to be careful about if and how and when we build cost and what are we doing it for,” Ms Holgate said.