Amazon buys trademarks to prepare for Australian arrival

ELI GREENBLAT
The Australian

US giant Amazon has made its biggest and most aggressive grab for territory in Australia’s $300 billion retail sector by securing a string of trademarks for its private label AmazonBasics that will pave the way for it to flood consumers with everything from cheap batteries and computer cables to bags and bedding.

Menswear, mops, food grinders and toilet paper holders — Amazon is going after it all with a private label offer, and in some categories, such as batteries, it has already seized more than 30 per cent of all stock sold online in the US.

Now Amazon is turning its gaze to Australia, and a carve-up of the local sector. The trademark grab shows its ambitions for the Australian market, mapping out the potential growth trajectory of the AmazonBasics label that poses a threat to retailers such as JB Hi-Fi, Harvey Norman and Super Retail Group, as well as general merchandise stores like Big W, Target and Kmart.

Amazon has also sought local trademarks for its latest concept “Amazon Go”, which only opened in the US this year and is the company’s maiden bricks-and-mortar store that allows consumers to walk in and shop without queuing to pay. Amazon’s state-of-the-art technology means the shop registers what you have taken and bills you later. 

Amazon last week lodged four trademarks around AmazonBasics with the Australian Trade Marks Office, covering dozens of categories, allowing it to slap its branding on thousands of consumer goods.

It also has pending trademarks for its disruptive “just walk out” Amazon Go, and a slew of technology services.

But the biggest threat comes from AmazonBasics, which has built a reputation in the US as a seller of inexpensive consumer electronics and quickly proliferated into household and consumer goods, undercutting rivals and seizing market share. 

The seemingly innocuous category of batteries provides an example of how Amazon has built its private label brand into the dominant player in the US.

A recent report from research firm 1010data showing the AmazonBasics private label had a 31 per cent share of online battery sales. Amazon Basics easily outsells every other brand online, including Duracell. 

According to 1010data, the online battery category in the US grew 75 per cent in the past year, but AmazonBasics grew 93 per cent. 

AmazonBasics “Elements” private label range has 16 per cent market share of the estimated $US60 billion ($80bn) online baby wipes market. According to US research firm Cowen and Co, Amazon’s private label apparel sales — including direct and through third-party vendors — are estimated at $US22bn or 6.6 per cent of the market. By 2021, the research firm estimates that number will hit 16 per cent.

AmazonBasics also has strength in the consumer electronics space, posing a challenge to JB Hi-Fi and Harvey Norman.

Last month Amazon confirmed it was searching for a site for its first fulfilment centre in Australia which would act as a beachhead for the arrival of its flagship retail services that would likely include groceries, streaming services and household and other consumer goods. 

Some analysts believe Amazon could strip as much as $4bn in sales from local retailers.

Investment bank Citi has argued that Amazon could seize more than 5 per cent of sales from JB Hi-Fi and 4 per cent from Harvey Norman. 

Credit Suisse found that if Amazon were to enter the domestic market this year, department store owner Myer could lose up to 55 per cent of its potential earnings before interest and tax by fiscal 2022, while Harvey Norman, JB Hi-Fi, Supercheap Auto, Rebel and Amart Sports, BigW, Kmart and Target faced “above-average risk’’.

“Almost anything that can be put in a small box is likely to be vulnerable to Amazon,” Credit Suisse analyst Grant Saligari said.