Last year, Australian retailers were graced with the presence of the most powerful force in retail, Amazon.

Retailers across the nation could be heard shaking in their boots, fearing the power and might of the tech giant. Some of the nation’s largest retailers began to double down on their “click and collect” deals, all to ensure that Amazon’s takeover of the Australian retail marketing could be halted. What happened since is very different.

Amazon did not have the immediate impact in Australia as anticipated. In fact, many customers have reported “teething issues” in the systems the company is famous for in the U.S. It’s hard to say exactly how Amazon couldn’t adapt as easily, and it may be too early to tell if Amazon will still be the “big bad wolf” of Australian retail.

I’ll give my thoughts on Amazon below.

Though few thought this was the case at the time, the Australian retail market seems to be in the middle of a downturn. Like it or not Myer is on the brink of collapse, David Jones is almost certainly not doing as well as it had hoped, and JB Hi-Fi is desperately trying to shield itself from all sides to corner the electronics market in Australia.

Where does that leave Amazon?

Amazon entered into the Australian market just as it was facing a downturn. It is unclear how long this downturn will last, but it is here now. Though Amazon may have a seemingly infinitesimal budget to throw at the Australian market, it has proven that entering the Australian market is not a cakewalk.

Let’s face it. Kogan isn’t doing anything revolutionary. Catch of the Day doesn’t reinvent the wheel. These businesses are essentially Amazon clones, which makes it hard for Amazon to differentiate itself. Without that differentiation, Amazon has to fight on price, which is notoriously difficult in a market that is so used to getting “crazy deals” (JB Hi-FI, Crazy Johns and others frequently use this term for their low prices).

As Amazon entered the market, it didn’t seem to anticipate the power of the clones. These clone businesses don’t need to be as big as Amazon, nor do they need to compete with Amazon purely on price. Amazon needs to make the first move here, and it’s hard to beat someone that plays your game.

Here is where I believe Amazon in Australia will struggle.

Many Australian retailers rely heavily on overseas money to fund their expansions. Have you ever wondered why there are so many Ugg Boots shops? Or maybe it seems odd that there are huge lines at Footlocker?

There is no secret that these stores are full of Eastern money, as people from China, South Korea and beyond buy in to their products. Many online retailers appeal to this exact same market by marketing products directed to this market.

It would appear that Amazon has not done this. Amazon has grown used to simply appealing to the everyday K-mart shopper, but without this market behind them they would find it increasingly difficult to continue operating.

Though it is too early to tell, it seems that Amazon has clearly underestimated the complexities in its Australian entry. Time will tell if they figure it out.