Amazon picks its first Australian warehouse, a step towards launching

SYDNEY (Reuters) – U.S. retail giant Amazon.com unveiled the site of its first Australian warehouse on Thursday and named a German executive as country manager, signaling it is prepared for industrial strife in the world’s 12th-biggest economy.

Three months after revealing plans to launch online shopfront service Amazon Marketplace in Australia, the Seattle-based retailer said it had chosen an industrial area outside the second-biggest city Melbourne for its first warehouse.

The move sets the stage for a showdown with Australia’s entrenched retail establishment such as Myer and JB HiFi, as well as with labor unions if Amazon’s German example is anything to go by.

Amazon said it was moving its “director of consumables” for Germany, Rocco Braeuniger, to the role of Australian country manager. Employees of Amazon’s German unit striked in December over pay and conditions.

Tim Kennedy, national secretary of the National Union of Workers, which represents factory staff, said Braeuniger’s appointment was a concern.

“We will do everything we can to ensure Amazon workers have the right to collectively bargain and organize in their union so they can continue to protect hard-won rights and conditions in Australia,” he said.

Amazon offered no further comment about Braeuniger’s appointment other than to say he had worked various roles at the company since 2006. Germany is Amazon’s biggest operation outside the United States.

Melbourne is an obvious choice of location for Amazon’s warehouse given its proximity to Australia’s east coast, where about four-fifths of the country’s 24 million population lives.

Australians can already buy Amazon products from offshore, but having an Amazon warehouse locally adds to pressure on the country’s brick-and-mortar retailers to protect already-fragile sales.

Shares of retailers like Myer and JB HiFi have been sold heavily since rumors of Amazon’s arrival began in late 2016, but those shares were little changed on Thursday, in a weaker overall market.

Another local Amazon boss, director of operations Robert Bruce, said in a statement that the warehouse, about 42 kms (26 miles) from Melbourne, would stock “hundreds of thousands of products for delivery to customers across Australia”.

Amazon has not said when it will start its shopfront service and warehouse service in Australia.

So far, it has said only that it is bringing Amazon Marketplace, in which it sells advertising space on its website and logistics support, to Australia.

The company has not mentioned plans to bring its fast-growing subscriber service, Amazon Prime, which typically brings a two-day delivery guarantee, to Australia.

Reporting by Byron Kaye; Editing by Stephen Coates

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