Amazon's Aussie boss speaks, many ears listen
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Amazon's Aussie boss speaks, many ears listen

When Amazon's Australian boss, Rocco Bräuniger, speaks, ears prick up. And not just human ones.

The man Australian retail CEOs probably fear the most, who was parachuted in from Germany to lead Amazon's e-commerce operations in this country last year, made a rare public appearance in Sydney on Tuesday.

Rocco Bräuniger played his cards close to his chest.

Rocco Bräuniger played his cards close to his chest.

Photo: Christopher Pearce

Speaking to an audience of a few thousand developers and tech industry executives, Bräuniger played his cards close to his chest, but revealed a few things that should make his competitors sit up and take notice.

He revealed he has two Echo smart speaker devices in his home, running two different versions of Alexa, the company's audio-based virtual assistant - one in his native tongue, and one in English. Or to be precise, Australian English.

"I prefer the Australian one because the humour is better than the German one," he said. "Which to be fair, is not a high bar to clear."

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Bräuniger said he had recently asked Alexa what the surf was like at Freshwater Beach, only to be corrected by the service to call it "Freshy". It highlights the attention to detail that has gone into what might prove to be Amazon's most transformative product, and another weapon it can use to bludgeon bricks and mortar retailers.

"It's an amazing experience," he said of using Alexa, "which we are going to bring in coming months and years to Australia."

The Echo device, and Alexa software platform, which launched in Australia in January, allows consumers to order products from Amazon using their voices.

The Echo device, and Alexa software platform, which launched in Australia in January, allows consumers to order products from Amazon using their voices.

Photo: AP

The Echo device, and Alexa software platform, which launched in Australia in January, allows consumers to order products from Amazon using their voices. Voice commands can also be used to power Amazon's streaming TV service, to operate various streaming music services, to hail an Uber, check the weather, order a pizza and so forth.

When Amazon last reported quarterly results in February, CEO Jeff Bezos went out of his way to note that the performance of Alexa had "far exceeded" his already "very optimistic" expectations for the product. "We don’t see positive surprises of this magnitude very often — expect us to double down,” he said in a shareholder letter.

For Australian retailers that have invested heavily to bolster their online offerings and avoid being steamrolled by Amazon, it must be sobering to realise the company is more than just a few steps ahead, and investing billions in an entire new paradigm.

Analysts believe that voice-enabled commerce and the smart speakers that power them could be the next big computing platform after smartphones (which themselves usurped the PC as the dominant device in people's lives).

Whether that transpires remains to be seen, but in voice commerce, it is clear that Amazon already has the lead.

"Amazon clearly believes that it has found its next growth driver," Macquarie analysts wrote of Alexa earlier this year. "So far, Apple's home speaker has been weak, Google is doing okay, but Amazon is dominating.

"This is going to be a high-profile battle as Amazon, Google, Apple and others compete for voice to become a new ecosystem."

‌Surveys suggest that consumers who use the Echo device spend significantly more on Amazon than those who don't (and even more than subscribers to its Prime expedited delivery service spend).

This is going to be a high-profile battle as Amazon, Google, Apple and others compete for voice to become a new ecosystem.

Macquarie

Yet while the rise of Alexa has been stunning - well over 20 million Echo devices have been sold in the US - it has not been without hitches. There are widespread concerns that Alexa has the potential to create signifcant privacy issues; reports have claimed that it eavesdrops on everything within earshot  (Amazon says the devices are off unless a wake word such as "Alexa" is spoken, and that anything recorded on an Echo can be easily deleted)

With privacy issues relating to the tech industry at fever pitch, this is an issue to keep an eye (or perhaps an ear) on.

At any rate, Amazon's launch in Australia has been underwhelming relative to the amount of media hype that foreshadowed its launch.

Those hoping for clues about its long-term intentions in this country on Tuesday would have come away disappointed. Still, few would bet against the company making a serious dent on Australian retail as it gets its act together.

In the US, it seems the only thing that can stop the company is some kind of government intervention. And the risk of that cannot be dismissed.

US President Donald Trump is reportedly "obsessed" with regulating Amazon, chastising its behaviour in  a series of tweets last week. Bezos personally owns the Washington Post, which has broken a number of major stories damaging to Trump.

Yet moving against a company known for cheap prices and generally popular with consumers could be risky politically:  there are comfortably more subscribers to Amazon's Prime service in America than there were voters for Trump in 2016.

John McDuling writes about business, technology and the economy. Previously he was a reporter for Quartz in New York, covered telecommunications and markets for the Financial Review, and worked in the finance industry.

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