Weekly Focus: Amazon Restricts AU Consumers to Local Site

This week, online consumers in Australia learn that they soon will no longer be able to shop on Amazon.com’s international sites – a result of the e-commerce giant’s move to sidestep the country’s new GST rule.

From 01 July 2018, Australians will be barred from shopping on Amazon’s U.S. and other international websites and be automatically redirected to the local platform, which offers a smaller inventory.

The move is a response to the country’s new GST rule that will see a 10% tax applied to all online purchases shipped to Australia from overseas. This previously applied only to orders exceeding AUD$1,000 (£566.49).

Amazon said in a statement: “While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites.”

The U.S. e-commerce giant said it would add another four million items, previously only available on the U.S. platform, to the Australian site to make up for the shortfall.

Amazon had launched the local site only last December, tapping a warehouse in Melbourne and setting up another in Sydney.

Commenting on the company’s move to geoblock Australians, Global Trade Professionals Alliance said it had expressed concerns over the impact of the GST on low-value items and attempts to impose additional costs on e-commerce imports.

Its CEO Lisa McAuley noted that these could discourage foreign companies from doing business with Australia and negatively affect the country’s small and midsize exporters, particularly those that depend on import volumes.

McAuley said: “This bill, which places the burden on electronic distribution platforms, has not been designed by the government in conjunction with industry and e-commerce stakeholders. The cost of complying with the bill will inevitably be passed to consumers.

“One has to ask whether the time is right for Australia to be looking to introduce measures domestically that could be perceived as anti-competitive and non-tariff barriers. The GTPA is concerned about retaliatory measures that would impact on e-commerce opportunities for Australian companies overseas.”

Alibaba Wants Network That Ships a Billion Parcels a Day

Jack Ma, Executive Chairman, Alibaba

Meanwhile, in China, Alibaba Group’s executive chairman Jack Ma has underscored the need for a logistics network that can ship a billion packages a day.

The Chinese e-commerce company currently moves 100 million packages a day through its logistics arm, Cainiao Network.

Ma said: “Twelve or 13 years ago, I said we’ll see one billion packages per year. Nobody believed me, but today, weekly package volumes exceed one billion. We have to think clearly today. We must understand what infrastructure is needed to support a billion parcels a day.”

He reiterated the company’s plans to invest ¥100bn (£11.67bn) in a smart logistics network, focused on expanding delivery coverage and improving cost efficiencies. The goal, eventually, was to provide single-day delivery across China and 72-hour delivery to the rest of the world.

He added that logistics costs, which currently accounted for 15% of China’s gross domestic product, needed to go down to 5%, noting that this figure stood at between 7% and 8% in countries with more developed logistics networks.

Ma said: “If we can use data to solve the problem of low transport efficiency and high logistics costs, we can create huge profit margins for the manufacturing industry and logistics sector.”

India Retail Payment Platform Snags £93.61m Investment

Indian retail payments vendor Pine Labs has secured USD$125m (£93.61m) in funds from Singapore’s Temasek Holdings and U.S. e-payment platform PayPal.

Both investors would have minority shares in the New Delhi-based company. Pine Labs’ founder Lokvir Kapoor said the country’s payments market was at “an inflexion point” and the company’s footprint in the offline payments space would be “critical” in facilitating online payment products.

Kapoor added that the new funds would go towards the company’s aim to build a “merchant-centric payments ecosystem”.

Pine Labs further lauded Temasek’s extensive network in Asia and knowledge of financial services companies, as well as PayPal’s global presence and expertise in the payments industry.

The Indian company said it hoped to tap both companies’ resources to expand its operations in Southeast Asia and boost its technological capabilities.

Pine Labs said it operated 300,000 payment points, processing 450 million transactions worth USD$15bn (£11.23bn) a year.

Japan’s Muji Sets Up Shop on JD.com

Japanese apparel and household retail chain, Muji, has set up its online store on JD.com, offering Chinese shoppers its full range of 7,000 products including home furnishing, clothing, and food.

Muji, which currently operates 231 physical stores across China, said it would tap its offline network to promote the launch of its online store.

It also unveiled plans to further co-operate with JD.com to roll out an “omnichannel” initiative in the second half of 2018, which would encompass, amongst others, membership programmes and new products.