Amazon steps up Australian book sales through The Book Depository

Most family-owned retailers would try to avoid attracting attention from global e-commerce giant Amazon. Not Booktopia chief executive Tony Nash.

Mr Nash has risked raising the ire of the world's largest online retailer by stealing the thunder from a looming announcement by Amazon of its official entry into the $1.8 billion Australian book market through its British-based subsidiary The Book Depository.

Booktopia chief executive Tony Nash has gazumped Amazon's announcement.
Booktopia chief executive Tony Nash has gazumped Amazon's announcement. Photo: Louise Kennerley

The Book Depository entered a third-party distribution agreement in November with Australian logistics company DAI Post and is preparing to announce a push into the Australian market.

Mr Nash, who acquired Australia's second-largest online book retailer Bookworld in 2015, detailed the Amazon deal to Fairfax Media before its official announcement.

Amazon, which recently opened its first physical bookstore in the United States, is stepping up its Australian presence ...
Amazon, which recently opened its first physical bookstore in the United States, is stepping up its Australian presence through The Book Depository.  Photo: AP

He says he's ready for the step up in competition.

"It's business as usual for us," Mr Nash said. "We've grown under the shadow of Amazon and The Book Depository and we've grown at 30 per cent-plus every year. They've never been a threat to us."

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Booktopia ships four million books a year from a 10,000-square-metre automated distribution centre at Homebush, in Sydney, and holds 750,000 units and 110,000 titles in stock. 

Booktopia expects sales to rise from $52 million a year ago to more than $80 million in 2016, following the acquisition in 2015 of Bookworld from publishing house Penguin Random House.

Australian booksellers believe Amazon's share will rise as The Book Depository adds more Australian titles to its ...
Australian booksellers believe Amazon's share will rise as The Book Depository adds more Australian titles to its catalogue and reduces delivery time from a few days to a few hours. Photo: Fairfax

Amazon and The Book Depository are the largest players in the Australian online book market and are estimated to sell more than $200 million of books a year to Australian consumers.

Australian booksellers believe Amazon's share will rise as The Book Depository adds more Australian titles to its catalogue and reduces delivery time from a few days to a few hours.

Mr Nash said The Book Depository's official entry into the Australian market would shine a spotlight on the strong growth in the online book market, as Booktopia considered a sharemarket listing. Late in 2015 the company hired investment bank Investec to advise on strategic options, including an initial public offering, a trade sale or a capital raising.

"More and more people are buying online. We are now the legitimate alternative to an international player like Amazon," he said.

​Australian Booksellers Association chief executive Joel Becker questioned whether Australian consumers who bought books from The Book Depository would have to pay GST on purchases of less than $1000, adding to the cost of purchases.

"At the moment they have a 10 per cent price advantage," Mr Becker said. "If The Book Depository has a presence here we'd want to ensure they have to pay that tax."

More than one-third of bricks-and-mortar book retailers are estimated to have gone out of business in the past 10 years, IBISWorld figures show.

Retail book sales have been falling more than 5 per cent a year over the past five years, but online book sales have surged 26 per cent a year.

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