Online retailer Amazon will build a mammoth 200,000 square metre robotic fulfilment centre in Sydney’s west in a move which is set to give the e-commerce giant an even stronger foothold in the Australian retail market.
Announced on Tuesday, Amazon will build the giant automated warehouse at the Oakdale West industrial estate in Western Sydney, close to the future location of the Western Sydney international airport. The centre is expected to create around 1500 warehouse jobs, along with another 700 during construction.
Craig Fuller, Amazon Australia’s director of operations told The Sydney Morning Herald and The Age the company’s $500 million investment in a new distribution centre was necessary to keep up with the level of online shopping demand the e-tailer expects to face in Australia in the coming years.
“The building itself is the equivalent size of 22 rugby fields and will house about 11 million different products,” he said.
“We needed to invest in a building of that type of size and scale so we can deliver the convenience, in terms of delivery speed, to the Australian customer base.”
Mr Fuller said while the centre would likely improve Amazon’s delivery times across most of its Australian customers, the retailer would not know the material benefits of the centre until its completion in 2021.
When we launched in Australia there were lots of unknowns…we had to learn the nuances of the Australian marketplace
Craig Fuller, Amazon Australia’s director of operations
While Amazon operates about 50 robotic fulfilment centres internationally, this will be its first in Australia. The centre will still use humans to pick and pack items, but instead of workers walking to the shelves to pick the items, robotic units take the shelves to them, improving fulfilment time and reducing the amount of walking workers have to do.
Amazon has faced criticism in the past over the treatment of its distribution centre workers, who have described working conditions at its Melbourne centre as a “hellscape” due to allegedly unrealistic performance targets.
NSW Premier Gladys Berejiklian said the jobs created by the new centre come at a time the Australian economy “needs them most”.
“Amazon’s decision to locate its first robotic centre in the Southern Hemisphere right here in Western Sydney is another great example about what the future holds,” she said.
Amazon first launched a local offering in Australia in 2017 but got off to a slow start, facing criticisms of poor product selection and weaker offering compared to rivals such as eBay.
However, the company has made significant inroads in the local market since then, with its Australian revenue doubling to over $560 million for 2019 and the business launching a number of new categories, including alcohol delivery and an online gardening and hardware offering.
Mr Fuller disputed criticism of Amazon’s local growth, pointing to today’s announcement as an indication of the retailer’s confidence in the Australian market, saying Amazon was taking it slow and steady.
“Whilst we’re an entrepreneurial company, at the heart of it we’re also prudent. When we launched in Australia there were lots of unknowns…we had to learn the nuances of the Australian marketplace,” he said.
“That doesn’t happen overnight, it takes time, and now we have the confidence to make this type of investment.”
During the COVID-19 pandemic, online retailing has boomed in Australia as housebound shoppers took their retail therapy online. NAB’s online retail sales index showed online trade for April jumped a record 16.2 per cent, a boom Mr Fuller thinks Amazon will now be well-placed to take advantage of.
“There’s a definite shift to online shopping, and it’s not only in Australia,” he said. “Retail is always evolving and developing, and online shopping is just another step in that evolution.”
Following its completion at the end of next year, the Western Sydney DC will double Amazon’s fulfilment capability in Australia. Earlier this month the company announced a new Brisbane-based fulfilment centre, which is set to be completed by the end of the year.
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