Online giant Amazon won't be allowed to operate at consistent losses and avoid paying its fair share of taxes, as the federal government promises to step up its protection of local retailers.
With Amazon anticipated to launch in Australia by the end of the year, there is growing concern that it will intentionally run at a loss to chase sales growth, build up its Australian operations, and disrupt existing players, knowing it can afford to.
But speaking at the Australian Financial Review Retail Summit in Sydney today, Federal Small Business Minister Michael McCormack attempted to allay fears.
"Amazon is coming. We will be monitoring it… very closely," he said. He also noted that any business that runs at a loss for three years must answer to the Australian Securities and Investments Commission.
He then outlined the opportunities that Amazon's arrival presents for small businesses. For example, smaller operators can harness the power of Amazon by becoming part of its online platform Amazon Marketplace.
Amazon will hold its first Amazon Marketplace seller summit in Australia on November 13. It will give businesses interested in selling on the new channel information on how to set up or grow online.
The summit will be run in partnership with the Australian Retailers Association and small business network the SME Association of Australia.
According to Amazon, more than 500 Australian businesses have already registered to sell their products on the platform, adding to speculation that the launch will take place before Christmas.
If you can't beat them, join them
The numbers in the United States suggest it could be a case of — ‘If you can't beat them, join them'.
Forbes reported in September that 43% of all US online sales — amounting to $US136 billion — were through Amazon in 2016.
There were also estimates that 7,000 stores would be forced to close in 2017, up from 5,000 last year.
According to David White, the national retail leader for Deloitte, research shows that by 2020 in the US, 50 cents in the dollar would be spent on Amazon, up from 36% now.
While many businesses are hurriedly preparing for the launch of Jeff Bezos’s $US500 billion company, it is deep into preparations.
Rocco Braeuniger has been appointed as country manager for Australia, and the Seattle-based behemoth has signed a lease on a former Bunnings Warehouse space on the outskirts of Melbourne for its first fulfillment centre.
Business Insider reveals employees at Amazon’s new fulfillment centre in Melbourne will be greeted with a sign reading: "It's still day one! Are you ready to make a difference?"
Founder Jeff Bezos first used the phrase in a letter to shareholders when Amazon became a public company in 1997, closing its first day at $US1.96.