"Everyone is assuming that Amazon is going to be a screaming success and they will put everyone else out of business. That may not happen," Mr Sims said.

Amazon won't comment on the specific timing of the start of its local operations. Some sharemarket analysts are convinced it could be later this month with the company already buying products from suppliers in readiness for an aggressive opening where prices of electronics goods, toys, sporting goods and outdoor products could be slashed by up to a third.

The next big Amazon event is a "seller summit" in Sydney on November 13, to be addressed by Australian country manager Rocco Braeuniger, where more than 500 Australian suppliers and businesses who have registered to sell their products on Amazon Marketplace will be given advice on how the platform works.

The company is also busily building a large distribution warehouse in Dandenong South in outer Melbourne which will be central to its Australian strategy and Australia Post revealed this week it is in advanced talks to provide the US group's express delivery services.

A massive Amazon warehouse in Germany. ACCC boss Rod Sims is cheering Amazon's entry into Australia and says the shake-up will be a winner for suppliers and shoppers. Supplied

But Citi analyst Bryan Raymond is convinced that the Amazon Marketplace, where third-party sellers transact with customers via the Amazon site, won't be the opening punch.

He told The Australian Financial Review Retail Summit this week that it appeared Amazon was readying for a "first-party" approach where it was buying products itself from suppliers to give it control over prices to send a clear signal to shoppers of its intentions to have the very lowest prices. Making an impact on "price" would deliver the biggest statement.

A pre-Christmas onslaught would be a big blow to already rattled Australian retailers. The share prices of most ASX-listed retailers are down about 30 per cent on the "fear of Amazon" factor as investors crunch their numbers on the likely impact. But that has been compounded by sluggish consumer spending, reinforced on Friday by figures showing that retail sales in September were below expectations again as households steered clear of discretionary purchases.


Federal Small Business Minister Michael McCormack said he would be closely watching Amazon in the early years to ensure that it paid its fair share of tax and didn't unfairly use its traditional business model of running its retail operations at a loss for year after year while making handsome profits from its Amazon Web Services cloud computing arm. Amazon on Friday rejected any suggestions it may take that route.

Australia Post revealed this week it is in advanced talks to provide the US group's express delivery services. Pat Scala

"Amazon pays all the taxes we are required to pay in every country where we operate," an Amazon spokeswoman said.

Australian Small Business and Family Enterprise Ombudsman Kate Carnell said she was still waiting to see a copy of the contract under which Amazon will allow small businesses on its marketplace.

The ACCC's Mr Sims said the benefits from the Amazon arrival were many, and the hand-wringing had been overdone in some respects. He did acknowledge that over time the build-up of market power by Amazon in other countries had been substantial, and the ACCC would scrutinise that carefully over the next few years.

"If a new bank came in and priced really low to win business, you and I would be standing on our chairs applauding," Mr Sims said.

Federal Small Business Minister Michael McCormack said he would be closely watching Amazon in the early years to ensure that it paid its fair share of tax. Louie Douvis

"Their (Amazon's) behaviour where they do have market power has caused a lot of disruption and if they ever do get market power here we will be watching carefully and I think it's the fear some businesses have of disruption," he said.


"We welcome Amazon, we think it's good for competition. I don't think the Coles, Woolworths and other big players will lie down, they will fight back and that is good outcome for consumers," Mr Sims said.

Mr Sims said the ACCC will be watching Amazon on other competition issues including unfair contracts and consumer provisions, including guarantee rights which international retailers including Apple have allegedly breached.

"We have had a lot of companies coming in here, Apple is a classic example, who we have before the courts now, who come into Australia and do business the same way they do overseas. We have stronger consumer guarantees here than other countries, so you can't say no refunds," he said.

Sims said the benefits from the Amazon arrival were many, and the hand-wringing had been overdone in some respects Bloomberg

"You have a statutory right to a consumer guarantee, so that is probably the issue we will be watching closely.

"If someone buys a good off Amazon and it doesn't work and if Amazon say for example you have to return it in ten days or it is too late, that's illegal in Australia so unfair contract terms and consumer guarantees are the two issues we will be watching Amazon on very closely."

The Amazon Marketplace model may take some time to generate momentum.

Morgan Stanley analyst Tom Kierath said eBay, which operates in a similar way with third-party sellers, had been operating in Australia since 1999. "Amazon Marketplace is kind of going to be like a poor man's eBay first up," he said.


Sean Sands, associate professor of marketing at Swinburne University of Technology, said Amazon was just another channel to market, and retailers should aspire to be on the platform for exposure as consumers research products. If they're not, they may miss out on possible sales.

Mr Sands said it was important to learn and partner with companies like Amazon and Jack Ma's Alibaba in China.

"I would perceive Amazon as just another potential channel to market," he said. "This is something that Alibaba do quite well in China. They have other platforms like T-Mall but they allow for control for brands to create their own branded experience as a sub-platform in the marketplace.

"When people are spending time looking on Amazon as a search point, you want to be there."

Mr Sims said the ACCC will be watching Amazon on other competition issues including unfair contracts and consumer provisions. David Rowe

There is a groundswell is some overseas markets that Amazon has become too powerful, particularly after its US$14 billion acquisition of the Whole Foods grocery business in the US a few months ago. It has since cut prices by as much as 40 per cent. There are growing calls for a break-up of Amazon into smaller businesses.

Mr Sands agreed with New York University Stern School of Business professor of marketing, Scott Galloway, that Amazon may be broken up into smaller companies in the future to keep the regulators at bay.

"Whether or not this happens we are yet to see," Mr Sands said. "But we are probably going to see government intervention in a company of this size."


The global giants in technology, Amazon, Apple, Facebook and Google, are all coming under this sort of pressure. The European Union has already slapped Google with a hefty antitrust fine and is putting pressure on Facebook and Apple on privacy measures.

Projections are that Amazon is set to become the first $US1 trillion company.

It is not only disrupting retail but taking on some of the biggest technology companies in the world. This includes Netflix by producing its own original content, streaming services such as Google's YouTube and social channels with Anytime by Amazon.

Its also taking on shopping days like China's Single's Day, US Black Friday and Cyber Monday. Its Amazon Prime Day posted $US1 billion in sales in 2017, a moderate sum compared with Alibaba's Single Day at $US17.5 billion, but up 60 per cent on the prior year.

"What Amazon has done is take a leaf out of the page of Alibaba," Mr Sands told the Retail Summit. "This is a day where singles are encouraged to reward themselves for being single and to shop til they drop.

There is a groundswell is some overseas markets that Amazon has become too powerful, particularly after its US$14 billion acquisition of the Whole Foods grocery business. MATT YORK

"With Amazon imminent … it's important to take stock and realise that only one retailer can be the cheapest. If you are trying to compete on price, you are likely thinking about the wrong point of difference. You need to think about experience. Give people a reason to come into your store."