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Amazon Retracts Geoblock in Australia, Strengthens Position

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In order to bolster presence in the e-commerce market of Australia, Amazon (AMZN - Free Report) has revoked its decision of obstructing Australians from shopping from its U.S. e-commerce site.

Notably, the decision came into effect in July this year as a result of imposition of 10% GST on imported online goods. Due to this tax regulation, the Australian customers were getting redirected to the company’s local site Amazon.com.au while searching products on U.S. site.

This step of Amazon only underscores its commitment to the customers. Following a slew of bad reviews by customers related to their shopping on the country’s local site, the e-commerce giant removed the geoblock for Australian shoppers.

The latest move is likely to aid the company in delivering enhanced shopping experience by expanding its product offerings. The customers will now again be able to access the wide range of quality products available on Amazon.com, the U.S. site.

This in turn will boost the customer base of the company. Further, the increasing exposure to Australia bodes well for the company’s holiday season initiative and is likely to drive its holiday sales.

Coming to the price performance, shares of Amazon have gained 29.7% on a year-to-date basis against the industry’s decline of 3.3%.



Australia Holds Promise

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

The company’s latest Australian initiative is a major positive as the Australian site of Amazon has scarce product range and extremely uncompetitive prices leaving customers with no option but to shop on other sites.

Further, the company also rolled out its Prime services in Australia this year. Amazon Prime and its customer friendly services will help the company in improving its shopper base in the country.

Consequently, Amazon is well poised to reap benefits from this rapidly growing market on the back of its efficient and aggressive retail strategies.

Additionally, the company’s resolution of the matter without troubling its customers strengthens its competitive position against eBay (EBAY - Free Report) which also faced the similar tax issue but was successful in resolving the problem without blocking its customers from shopping on its U.S. site initially.

Strengthening Global Footprint

Amazon’s continued focus toward strengthening its presence in the global online retail market will continue to aid its business growth.

Apart from Australia, the company has recently made its foray into Turkish e-commerce space. Reportedly, Amazon will offer products in 15 categories, including books, electronics, tools, toys and baby goods, from over 1,000 Turkish businesses to customers across the country.

Further, Amazon introduced the Hindi – the most widely spoken regional language of India – version of its online shopping website and application for mobile to make shopping easier for customers in India, in turn bolstering its footprint the country.
Reportedly, the company is gearing up to make its foray into the clothing, accessories and footwear market of Brazil via its Brazilian marketplace. The latest move will strengthen its footprint in Brazil as well as Latin America.

We believe Amazon’s expanding global e-commerce presence along with its vast seller base, robust product offering, distribution strength, strategic acquisitions and partnerships will continue to aid its dominant position in the e-commerce market.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are TripAdvisor (TRIP - Free Report) and Stamps.com (STMP - Free Report) . While TripAdvisor flaunts a Zacks Rank #1 (Strong Buy), Stamps.com carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for TripAdvisor and Stamps.com is currently pegged at 16.05%, and 15%, respectively.

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