Last year Amazon opened its new state of the art office in Dublin, Ireland bringing its total number of employees on Irish soil to over 2500. Despite it’s presence here in Ireland, Irish customers of Amazon could be lead to think the company is oblivious to our very existence. As a regular shopper on Amazon I find myself mildly infuriated when I search for a product, sieve through all the alternative options for an hour, only to be met with the information that this product is not available in Ireland. After being through this process many many times, I’ve often wondered why the E-Commerce giant has given Ireland the cold shoulder.
As there is no Amazon site made for Ireland, most Irish consumers revert to the UK site while some will also try other European sites (.de, .fr, .es etc) or even the US site, depending on the desired product. Don’t get me wrong, the UK site works most of the time and when it does it’s always a great service. However, this does nothing to dampen the blow as you close in on the deal of the century, only for your hopes to be torn to shreds. I once again felt the company’s lack of regard for its Irish customers when I purchased the new Amazon Echo. Despite the product not being available in Ireland, I had my cousin in the UK bring it over when she was visiting. I finally had my hands on the product and all that was left to do was to download the app to finish off the setup. However, as I thoroughly searched the app store, I soon realised it was not going it be found. Amazon had restricted this app from Irish use. This again highlighted their lack of consideration for their Irish customers and forced me to call on my computer skills to obtain a cracked version of the app.
This problem is not limited to Ireland, with much bigger economies such as Australia and Africa also plagued with this minor inconvenience.
Some have seen this as an opportunity. Parcel Motel have built a large amount of their Irish customer base by offering an easy solution to this annoyance. Parcel Motel allow you to obtain a virtual UK address and then they forward the product to your Irish address or to a collection point. While this is a great workaround, its still extra work and cost for the consumer.
Some may point towards Irish shopping habits as a possible reason for Amazon and other retailers snubbing Ireland, with only 51 per cent our population having bought something online by the second quarter of last year, compared to a 65% European average (Lillington, 2016). Conversely, it could be argued that the barriers to online shopping is the very reason the our rate is lower.
It turns out there could be a pretty logical explanation to Amazon’s approach. Firstly, for some countries such as Australia, various laws had made the possibility of the company successfully operating too difficult, however these have since been lifted. As well as this, Amazon originally setup in countries with lower VAT rates. By having a warehouse and selling out of the UK, Amazon could offer consumers cheaper products from the difference in VAT rates alone (Quora, 2018). This explanation checks out when we look at other cases such as Amazon choosing to operate in Germany ( standard VAT rate of 19%) and snub the Netherlands (standard VAT rate of 21%) (European Consumer Centre Germany, 2015) (EXPATAX, 2015).
However this could soon all change. As Amazon gains power and becomes a household name they can afford to venture into new markets. As E-Commerce becomes more popular governments are under more pressure to relax laws inhibiting e-Commerce operations (as seen in Australia). The good news for Ireland is that rumors of a new Amazon warehouse being opened are beginning to circulate, which may also lead to a native website. As the Brexit deadline approaches and a ‘no-deal’ becomes more likely, it may no longer make sense for Amazon to base a lot of it’s European operations in the UK. Sellers will lose a lot of business if the European market becomes closed off. Amazon in a letter said sellers should consider sending stock to European “fulfilment centres”(ref – independent). While an English version of its German site Amazon.de will suffice for the re-allocated stock an Irish site is beginning to make a lot of sense (Pope, 2019).
References
European Consumer Centre Germany , 2015. VAT rates in Germany. [Online]
Available at: https://www.evz.de/en/consumer-topics/buying-goods-and-services/shopping-in-germany/vat-rates-in-germany/
[Accessed 5 3 2019].
EXPATAX, 2015. VAT in the Netherlands. [Online]
Available at: https://www.expatax.nl/vat
[Accessed 5 3 2019].
Lillington, K., 2016. No Irish need apply when it comes to UK online retailers. [Online]
Available at: https://www.irishtimes.com/business/technology/no-irish-need-apply-when-it-comes-to-uk-online-retailers-1.2487385
[Accessed 5 March 2019].
Pope, C., 2019. Amazon UK users may have difficulties after a no-deal Brexit. [Online]
Available at: https://www.irishtimes.com/news/ireland/irish-news/amazon-uk-users-may-have-difficulties-after-a-no-deal-brexit-1.3762917
[Accessed 3 March 2019].
Quora, 2018. Why doesn’t Amazon have a website specifically for Ireland?. [Online]
Available at: https://www.quora.com/Why-doesnt-Amazon-have-a-website-specifically-for-Ireland
[Accessed 5 March 2019].
Beyond The Border 