You don’t have to be too bright to be an analyst at Citi, all you have to do is read ChannelNews and then write a report.
Analyst Brian Raymond has suddenly alerted his clients to the fact that Amazon could launch a fully functional web site within 60 days, we told readers this back in July but despite this the media that Citi like sucking up to which includes The Australian, Financial Review and the Sydney Morning Herald are treating his report as if the information is new.
We also told readers how Amazon is set to target phone carriers. See Here.
Then there was our exclusive story on how Amazon is recruiting staff. See Here.
Raymond then goes on to claim that Amazon has started buying up stock and that they will maintain a strategy of matching or being the lowest price in the Australian market at all times. Something else we told readers about months ago.
Citi claim a formal launch of a dedicated Australian Amazon website could occur sometime in October, ahead of Black Friday on November 24, a US sales event that is becoming increasingly popular in Australia, and could even include free delivery to ensnare shoppers.
“Launch timing remains uncertain and subject to website and logistics testing, but we would expect a formal launch to occur sometime in October 2017, ahead of Black Friday on 24 November.” he told his clients.
I hope clients don’t have to pay for Raymond’s research which claims that Amazon, recently announced the Melbourne suburb of Dandenong for the location of its maiden 24,000 sqm fulfilment centre in Australia, and that the big US retailer could offer free shipping to customers to attract traffic to its site.
It could also be followed up by the offer of its highly popular Amazon Prime service in Australia, which delivers a portfolio of services such as photo and data storage on the cloud, access to a Kindle library, music and move streaming for a heavily discounted annual price.
“We expect Amazon to offer free delivery over a value threshold, with the (Amazon) Prime service to be offered later, potentially coinciding with Prime Day in July 2018.”
Mr Raymond said Amazon has already set terms with suppliers and has begun accumulating stock to prepare for its Australian launch.
We told our readers about this two months ago, we also named vendors such as Harman, Acer, Alcatel, Lenovo, Logitech, Samsung and LG all Companies that are now allowing for increased sales from the launch of Amazon, they are also Companies who we reported had already signed contracts with Amazon.
“Amazon will be buying directly from leading suppliers, holding inventory and setting retail prices” Raymond said “Buying terms have been set and first orders have been placed with suppliers in recent weeks. This increases near term gross margin risks for retailers as price will be Amazon’s key lever. Amazon will not have a meaningful advantage in two of their three key pillars in the short term (range and delivery, which will evolve over time).
“As a result, we expect prices to be competitive in order to drive volume.”
One thing that we believe is that Raymond has got it wrong when he claims that Amazon will wipe out 30% of JB Hi Fi earnings.
