Online shopping wars heat up as Amazon Australia launches free shipping

First it was supermarket wars, now the battle for your online dollars has become even more intense, with eBay and Amazon offering free delivery for those who pay for premium services

Online shopping giant Amazon recently upset Australian customers by banning them from using its US site. But tomorrow, the global behemouth — which has been pretty cautious about releasing any details, let alone price, of their Amazon Prime offer here — will launch free delivery for those who pay an annual subscription for its local Prime Service.

This follows eBay, the biggest online shopping site, saying that from this month it will offer free delivery and returns to subscribers for 15 million different products.

“Free delivery is the number one priority for customers who want to shop online,” eBay Australia’s CMO Julie Nestor said.

Roy Morgan research from today shows that Amazon has half the number of monthly visits compared with eBay. Local auction-listing site Gumtree — also owned by eBay — is the second most popular site, also ahead of Amazon.

“(There are) 9.5million (Aussies) at least looking at an eBay website in a month, that’s followed by Gumtree at about 5.5 million, Amazon comes in 4.6 million,” Roy Morgan CEO Michelle Levine said.

In the US, Amazon Prime recently increased its price from US$99 to US$119 which equates to around AUS$160

It might need to be cheaper here to compete. eBay’s Plus service costs $49 a year, and there is an introductory offer of $29.

“We always have to be competitive in this market to attract new customers,” Nester told Nine News.

Roy Morgan’s research shows that nearly 70% of Australians aged 14 or older visit online shopping or auction sites once a month — so there’s clearly a big audience to battle over.

And there’s little doubt eBay has plenty to defend in this latest war. Even this weekend it’s launching a massive online sale. But Amazon has some fixing to do here. By forcing customers to use its Australian site — turning off the US and UK — the business angered those Aussies who liked being able to access the range and prices overseas.

But one big attraction for Amazon is its entertainment package, which includes movies and music. But is that enough for Australian consumers who already have access to Netflix and Stan? For most, its the shopping and free delivery they’re really after. And that’s not lost on some of Australia’s leading business experts.

“This is the make or break of Amazon here in Australia. They need membership to drive volume and they need membership to drive sales,” Associate Professor Gary Mortimer of QUT Business School said.

* In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.