Amazon will block Australia-based customers from buying products on its overseas sites when the goods and services tax is applied to all imported e-commerce items in July.
From July 1, Amazon will redirect local shoppers trying to visit the likes of Amazon.com and Amazon.co.uk to its much smaller Australian site, thwarting those who enjoy the lower prices and larger range offered abroad.
The move is a response to the Australian government’s decision to slap the 10 per cent GST on all items bought from overseas sites and shipped to Australia, rather than just those worth more than $1,000 as at present.
Without blocking the overseas orders, Amazon would have had to cut its already thin margins or pass on the charge to customers.
“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites,” an Amazon spokesman said in a statement on Thursday.
The spokesman said customers will continue to have access to Amazon US and other overseas sites on the new global store.
The global store has more than four million items, however Amazon US has 480 million products.
“This will allow us to provide our customers with continued access to international selection and remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas,” the spokesman said.
Some 4.6 million Australians visited Amazon’s US site in November 2017, the month before its Australian website went live, according to consumer metrics company Nielsen.
Amazon’s new restrictions may boost visits to Australian website, which been criticised for a relatively small product range and higher prices since it began taking orders in December.
The Australian site has more than 60 million products across 23 categories, including toys, books and clothing.
Retail stocks on the ASX rose following Amazon’s announcement.
Shares in local e-commerce site Kogan.com gained 0.2 per cent to $9.09, while shares in electronics retailers JB Hi-Fi and Harvey Norman rose 2.4 per cent to $23.99 and 1.7 per cent to $3.60, respectively.