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Amazon's E-commerce Presence Expands With Prime in Australia

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In order to strengthen presence in the Australian e-commerce market, Amazon (AMZN - Free Report) has rolled out its Prime services in the country.

The company expanded its e-commerce operations to Australia last year. Amazon Prime and its customer friendly services will help the tech giant in improving its shopper base in the country.

With the latest move, the company will be able to eliminate the geoblock which the company was planning to impose. Notably, the geoblock would restrict Australian customers from shopping on international websites of Amazon. No wonder this move drew a lot of flak as the Australian site of Amazon had a scarce product range and extremely uncompetitive prices leaving customers with no option but to shop on international sites.

Following the criticism, the Prime services in the country will allow the customers to place orders for the products available on Amazon’s U.S. website directly from its Australian website and facilitate free international deliveries of the items ordered.

Consequently, this will improve the shopping experience of the customers and overcome the price related problem with shoppers, which will further help in fortifying its Australian business.

Coming to the price performance, shares of Amazon have returned 47.4% on a year-to-date basis, outperforming the industry’s rally of 29.9%.



Prime Benefits — Key Catalyst

The Australian Prime members will now avail free two day delivery service which is currently available in several cities like Sydney, Adelaide, Brisbane, Canberra, Hobart, Melbourne, Perth, Gold Coast, Gosford, Newcastle, Toowoomba, to name a few.

Other facilities like video streaming services from Prime Video, Prime Reading, access to free games from Twitch Prime and shopping through Alexa will also be available.

We believe all these initiatives will aid Amazon in attracting customers to its Australian e-commerce platform. Further, these benefits will aid growth of Prime membership which will drive the top line.

Australia Holds Promise

Amazon’s expanding seller base, distribution strength, strategic acquisitions and partnerships bode well for its dominant position in the global e-commerce market.

We believe all these along with its well performing Prime are likely to help the company in gaining momentum in the Australian e-commerce market which holds immense potential.

Per the latest data from Statista, revenues in the e-commerce market of this country are expected to hit $11.8 billion in 2018. Additionally, the revenues are expected to grow at a CAGR of 8.8% between 2018 and 2022 and to reach $16.5 billion by 2022.

Consequently, Amazon is well poised to reap benefits from this growing market with its efficient and strong retail strategies.

Amazon Prime Expanding Globally

The launch of Prime in Australia augurs well for its mission of global expansion. Last year, Prime was launched in the Netherlands and Luxembourg and added facility for customers in Belgium to join Prime and shop in Dutch.

The company also introduced Prime in Singapore.

We note that Amazon’s strong efforts toward enhancing customer services and expanding its presence worldwide will continue to benefit the company in sustaining its leading position in the online retail market.

Zacks Rank & Other Stocks to Consider

Currently, Amazon sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader technology sector are Groupon (GRPN - Free Report) , Twitter (TWTR - Free Report) and Upland Software (UPLD - Free Report) . All the three stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Groupon, Twitter and Upland Software is currently pegged at 6.5%, 23.1% and 20%, respectively.

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