Amazon starts Australian trial after months of hype

By Byron Kaye

SYDNEY (Reuters) - Amazon.com Inc's Australian arm began an order-taking trial on Thursday, giving life to the hype which has preceded its arrival in the world's No. 12 economy and weighed on the shares of the brick-and-mortar retail sector.

The trial kicked off at 3 p.m. (0400 GMT) with the Amazon Australia website's search box filling in product names automatically. A representative for Amazon, which has never given a start date for Australia, declined to comment.

"It's obviously working because auto-population is there," said Liz Cassidy, founder of Amazon-registered beauty products retailer Third Sigma.

Cassidy, who already sells product overseas via Amazon, said she had made no Australian sales in the first hour, but noted that the trial involved a limited number of shoppers.

Australia has long had Amazon-registered sellers but they have been limited to sending goods offshore as Amazon had no warehouse in the country. Until now, Australians have had to wait long periods and pay sizable shipping costs for deliveries.

While online vendors are excited about the opportunities, Australia's more traditional shopkeepers have faced pressure to convince investors they can compete against the U.S. giant since it confirmed its plans for Australia in April.

Shares of Harvey Norman, Australia's biggest electronics retailer, are down 9 percent since April 17, the day before Amazon said it was coming to Australia. Shares of Australia's biggest department store chain Myer Holdings Ltd are down 39 percent.

"It's not as if the majority of retailers in Australia are making a fortune and growing their businesses," said Gerry Harvey, executive chairman of Harvey Norman.

"If you're in clothes and shoes and handbags, you can't take a lot more pressure."

Amazon set up its warehouse in Australia's second-biggest city of Melbourne, on the east coast where four-fifths of the country's 24 million people live.

Shoppers will watch delivery times closely with Christmas just around the corner.

"It will be really interesting to see whether it lives up to the hype," said Tim McKinnon, the Australian managing director for eBay Inc, an Amazon competitor.

Some shoppers took to social media to voice frustration that the Amazon Australia website had not begun taking orders publicly.

(Reporting by Byron Kaye; Editing by Stephen Coates)