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Aussie retailers will no doubt fight back. This may involve competing on price, providing much better customer service and properly investing in a world class online shopping experience.
The problem is this will cost money while Amazon will still increasingly capture market share. For example, investment bank Credit Suisse estimates companies such as JB-Hifi and Myer could lose a third to over half their earnings respectively in the coming years because of Amazon. This cannot be good news for their share prices.
That is why many Aussies may stand to lose more money from their investment exposure in Australian retailers than they’ll actually save from shopping at Amazon.
Is this an investment opportunity?
Yes. If you have any investment exposure to Australia retailers, it is time to take a good hard look at how they are responding to Amazon’s arrival.
Some companies (like Wesfarmers) are investing in innovation to compete while others like Gerry Harvey (the billionaire chairman of Harvey Norman) take a more confrontational approach calling Amazon a parasite.
The other opportunity to consider is an investment exposure to Amazon itself and the broader online shopping industry. You could do worse than start investing in a sector that will fundamentally transform the way society shops over the next decade.
Note: At the time of writing, the AtlasTrend Online Shopping Spree Fund and the AtlasTrend Big Data Big Fund both own shares in Amazon.
Is this an investment opportunity?
Yes. If you have any investment exposure to Australia retailers, it is time to take a good hard look at how they are responding to Amazon’s arrival.
Some companies (like Wesfarmers) are investing in innovation to compete while others like Gerry Harvey (the billionaire chairman of Harvey Norman) take a more confrontational approach calling Amazon a parasite.
The other opportunity to consider is an investment exposure to Amazon itself and the broader online shopping industry. You could do worse than start investing in a sector that will fundamentally transform the way society shops over the next decade.