Amazon and Temu compete for the $380 billion market

As the potential of the global e-commerce market is being explored , competition from large e-commerce platforms such as Amazon and Temu has spread to every corner of the world , and the Australian market is no exception.

According to GlobalData, Australia's e-commerce market is valued at A$81.9 billion ( about RMB 382.71 billion ) in 2024 , a year-on-year increase of 9.3%; by 2028, Australia's e-commerce market is expected to grow to A$109.7 billion (about RMB 512.62 billion ), with a compound annual growth rate of 7.6%.

A research report released by IAB and Pureprofile also shows that as many as 83% of Australian consumers shop online every month, and 60% of them shop online at least twice a month .

Amazon and Temu are growing rapidly in Australia

In the Australian e-commerce market, Amazon and Temu have a great influence on consumers.

Roy Morgan research data shows that in the past 12 months ending June 2024, Amazon, Temu and SHEIN's combined annual sales in Australia reached US$8 billion, of which Amazon contributed more than US$5 billion. The three companies drove Australia's overall online spending up 12% from the previous six months.

Roy Morgan data shows that Amazon currently has 7.9 million users in Australia. In the past 12 months ending June 2024 alone, Amazon's local users increased by 1.1 million, a year-on-year increase of 16%.

Amazon currently has about 10% of the Australian market , but Roy Morgan market researchers predict that its market share will increase to at least 25% by 2030.

Amazon's official news also stated that during last year's summer promotion, Australia was the only market to achieve double-digit sales growth, with a year-on-year increase of 19%, ranking first in the world in terms of growth rate.

Although Amazon dominates the local market, Temu's offensive should not be underestimated.

Roy Morgan data shows that Temu has captured nearly one-fifth of Australia's retail market, with at least 3.8 million consumers shopping through the platform each year.

Similarweb's 2025 Australian Digital 100 report also mentioned that Temu is the fastest growing website in Australia, with the number of unique visitors increasing by 72% in the past year.

Research reports from other institutions also show that in May last year, Temu's number of online users in Australia exceeded that of local retailers such as Coles, Flybuys and Bunnings; in October, Temu's share exceeded eBay for the first time.

In addition, Temu was the most downloaded iPhone app in Australia in 2024 and the only shopping app to make the top ten free apps in the App Store.

Amazon and Temu's competition may become fierce

In Pattern’s recently released e-commerce forecast for 2025, not only did it highlight the important trends that are reshaping Australia’s online retail landscape, it also mentioned that as Amazon develops a strategy to cope with Temu’s rapid growth, Australia’s market landscape is expected to face a major transformation.

Pattern Australia managing director Merline McGregor said as Amazon continued to demonstrate its commitment to innovation and adaptability in the Australian market, the launch of Amazon Haul could change consumer shopping behaviour as price-sensitive customers weigh Temu’s aggressive pricing against Amazon’s wider value proposition, including Prime delivery and benefits.

Amazon and Temu have always adopted different business strategies in the Australian market .

Merline McGregor said that Amazon has been making steady progress in Australia , expanding its market share every year through Prime membership, same-day delivery services in metropolitan areas, and subscription and savings programs; in addition, Amazon's model has always been "build the platform first, and customers will come naturally."

Temu is growing by "buying market share". McGregor said, "If you search for anything on Google today, Temu will appear in the search results." Coupled with its long-standing product pricing strategy, Temu can quickly attract Australian consumers who are constantly looking for the cheapest options due to the pressure of living costs.

If Amazon Haul, which focuses on low prices, expands into the Australian market, the business strategies of the two parties will overlap and will also have an impact on Temu.

In addition, both parties made considerable efforts in delivery speed last year.

At the end of last year, Amazon opened a new large distribution center in Perth, which greatly increased Amazon's storage capacity in Australia by 500%; Temu also began to allow qualified sellers to ship directly from Australian warehouses, shortening the delivery time to as fast as one working day. This move not only enriched the product variety, but also significantly improved the shopping experience of local consumers. The impact of these strategies will also spread to this year.

Cross-border platforms "fight", local companies "suffer"

Sendle (Australia logistics company) managing director Laura Hill said that as the cost of living pressures remain, Australians are still looking for the cheapest options. "This means they are shopping overseas, which has a huge impact on the local economy, especially the small business sector."

The continued expansion of overseas platforms such as Amazon and Temu means a reduction in the share of local companies and platforms, and Catch, a well-known Australian e-commerce platform, is one of them.

Recently, Catch announced that it will stop trading and selling products from April 30, 2025. Catch has laid off nearly 200 employees, and 100 e-commerce positions have been transferred to Kmart (a supermarket under Wesfarmers). Data shows that in the past three and a half years, Catch's losses have accumulated to more than 350 million Australian dollars (about 1.63 billion yuan).

It is reported that Catch was formerly known as Catch of the Day, a well-known discount website in Australia. Catch of the Day was founded in 2006, but was impacted by platforms such as Amazon in 2016, so it began to transform and changed its name to Catch, and began to accept third-party sellers. It was later acquired by Wesfarmers for US$230 million in 2019.

At its peak, Catch's sales reached 528 million Australian dollars (about 2.42 billion yuan), with a 70,000 square meter warehouse and more than 50,000 products on the platform.

However, the entry of SHEIN and Temu in 2022 and 2023 changed this grand scene. Coupled with Amazon, which has already occupied the market share, Catch is under attack from both sides. The financial report shows that Catch's annual sales in fiscal year 2024 will only be 227 million Australian dollars (about 1.06 billion yuan).

Wesfarmers managing director Rob Scott also said Catch was unable to compete with fierce competition from overseas brands. "The recent increase in competition in the Australian e-commerce industry has had an impact on Catch's financial performance and growth prospects."

Laura Hill believes that if Catch cannot compete with these platforms, local small businesses will only face greater pressure.

In general, with the fierce competition from international giants such as Amazon and Temu, the Australian e-commerce market is undergoing unprecedented changes. However, who can stand out in this competition in the future depends not only on price, but also on whether they can accurately grasp consumer needs and provide unique and high-quality services. As Merline McGregor said, companies must find their own unique positioning and establish meaningful connections with consumers in order to stand out in the fierce competition.

Temu

Amazon

Australia