As rumours spread that Amazon is scouring the market for a warehouse space, is its Australian appeal overrated?
The e-commerce giant hit a market value of US$250 billion after reporting is quarterly results last week.
Amazon shares rose 20 per cent after it smashed quarterly earnings and revenue estimates.
Amazon raked in US$23.18 billion in net sales over the quarter, marking a 20 per cent year-over-year increase.
However, as rumours spread it is hunting for space down under, some local analysts are sceptical about its local prospects.
Euromonitor research analyst Julia Illera said there are limitations to its Australian reach.
"Australia is a market that currently doesn’t have localised access to Amazon’s full retail operations.
"Australian consumers can, however, purchase Kindle devices and e-books via Amazon.com.au.
"While the question remains “when” rather than “if” Amazon will establish warehouses in Australia, any such speculation is greeted with enthusiasm from Australian consumers – and trepidation from Australian retailers.
"Yet if Amazon decides to open a warehouse in Australia, such a momentous impact isn’t necessarily guaranteed – in the short term, at least.
"Australia is a large country with a small and more-or-less sparsely spread population, so Amazon will face the same challenges other companies experience when they operate in Australia.
"The Amazon business model thrives on their logistics, i.e. warehousing and distribution, and replicating that in Australia is not easy, due to the geographical expanse and expense surrounding such operations, particularly if it involves further scrutiny as to the amount of tax paid locally."