Australian retailers rally as Amazon gets cool reception

SYDNEY: Amazon.com Inc´s Australian arm took its first orders on Tuesday, ending the suspense over its opening date and sending retail stocks higher amid complaints of limited product range and uncompetitive prices on the U.S. e-commerce platform.
The cool reception suggests the $550 billion newcomer will need to trim its margins and ramp up stock selection in the world´s No. 12 economy, and eased the market´s worst fears about its potential to devastate brick-and-mortar incumbents.
While Amazon.com.au was generally competitive on price, analysts found some items were more expensive on the U.S. company´s website.
An iPhone 7 Plus was selling on Amazon for A$1,345 ($1,027.71) compared with A$1,199 at electronics rival JB HiFi Ltd.
"Amazon´s not materially cheaper on a wide basket of items than the retailers," said Vertium Asset Management portfolio manager Daniel Mueller.
"The retailers are rallying. It´s a realisation that Amazon is not going to kill Australian retail, at least not today.
"Shares of JB HiFi and larger electronics retailer Harvey Norman Holdings Ltd jumped 5 percent, clawing back most of their declines since Amazon announced its Australia plans in April. The broader market was down 0.2 percent.
Shares of No. 1 department store chain Myer Holdings Ltd rose 2 percent, still down more than a quarter since April.
Myer and Amazon carried the same dress from Australian fashion designer Sass & Bide on Tuesday, but Myer advertised 78 items from that maker compared to Amazon´s eight.
Helping the positive sentiment toward retail stocks, the country´s retail sales bounced in October after months of lukewarm demand, according to official data.
Online sales account for less than 10 percent of the A$300 billion retail sector. Citi analysts described Amazon´s initial Australian offering as "patchy", adding in a note to clients: "We expect Amazon will not be disruptive to Australian retailers this Christmas".