E-tailers warn faces rocky road ahead

E-tailers warn faces rocky road ahead

Australian e-tailers have issued a stern warning to the much-hyped US e-tail heavyweight that it cannot expect to simply stroll into the local market and take over.

The missive comes as prepares for its official launch into the Australian online retailing market this Thursday May 4.

"We have seen lots of American companies come and go," said general manager Michael Glezerson, warning must be wary of the cultural differences between Australia and the US.

"Entering the Australian market is not going to be easy -- there are some very strong players who have been around for years."

However, Glezerson did welcome the competition will bring to the Australian market.

"It's nice to see new online businesses starting up because it encourages others to go online and it encourages competition," he said. is ranked as one of the top 5 US online retailers. The company is a joint venture between, SOFTBANK and epartners, which is 50 per cent owned by News Corp.

While the Australian site works on the model of the US parent company, local e-tailers say it will not be able to employ the same strategies here.

The launch of's Australian site has not been without hiccups, including legal action over the Australian domain name,, owned by online auctioneer, Duncan Angus. was able to circumvent the problem by having customers go through the US portal and select which country they purchase from.

"I think they will encounter a few problems in the Australian market -- the most obvious is not having a URL for Australia," said Estore's general manager Steven Spilly. "It is not an insurmountable problem, but it is major. If I were starting an online retailing store here, I would change the company name to make sure I got an Australian address."

Spilly said the company will find the Australian market very different to that in the United States. "The Australian online market is radically different to the US, and if they try to adopt the same sales techniques there could problems. As a public company, they cannot position themselves on price. They will have to offer more than just discounts in terms of customer service and delivery," he commented.

"They are definitely behind the eight ball initially because they have no knowledge of the Australian market, no track record of fulfilment and they need time to develop alternate sources for additional product ranges."

Dstore's general manager David Gold said he welcomes any new entry into the market because it encouraged the consumer to shop online. But he agreed would be unable to operate on a low margin basis.

"Even if the advertising market is sustainable in the US, it is not in this market," he said. "I think the big players here in the future will be the multichannel players."

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