Amazon’s arrival in Australia seemed to sound the death knell for most Australian retailers. How could they possibly compete against the incredible might of Amazon, with its incredibly efficient supply chains, and ability to cut cost at volume.

Amazon is a giant threat in the US, buying out Whole Foods super markets, sending Barnes and Noble to the brink of bankruptcy, all the while being barely profitable itself. The great irony in Amazon’s growth is that it was willing to cut its operating margin so finely just so it could gain market share. How could anybody compete with someone willing to operate at a loss to gain ground?

Well, I’m here to say, fear not Australian retail. While the threat may be real, the counter threat that Australian retail poses to Amazon is just as strong. The best defence Australian retailers’ have is their superior understanding of the market, and means their potential counter attack could be even worse than Amazon felt in the U.S. The perfect metaphor for this may have already been presented to us in the form of “The Money Fight” that happened recently between Floyd Mayweather and Conor McGregor.

In case you were unaware, recently there was a fight between one the greatest boxers of all time Floyd Mayweather, and one of the greatest Mixed Martial Artists of all time, Conor McGregor. While very entertaining, and one of the most watched sporting events of all time, the fight served to demonstrate that boxing as a sport had certain rules that made it completely unlike mixed martial arts. Conclusively we were shown that Mixed Martial Arts could be competitive in a boxing arena, but it would not be able to match the specialisation of a boxer.

For Australian brick and mortar retailers, who have spent the time and the energy occupying real estate strategically, this is their boxing arena. Amazon may be competitive, much in the same way as McGregor was in boxing, but they won’t be able to win. Take Bunnings Warehouse as an example., who would be near impossible to beat in the home, timber and hardware space.

McGregor primarily lost that bout because he was used to fighting in longer rounds, for a shorter period of time, with smaller gloves. Of course, this doesn’t put Australian Retail in the clear just yet. It is the Australian e-Commerce players that should be sitting up and taking notice.

Amazon’s arrival will present one of the biggest threats to the burgeoning Australian e-Retailers that they have ever faced. Like McGregor in the MMA arena, part of Amazon’s biggest selling point to Australian consumers is that the online arena is their domain (pardon the pun). To challenge Amazon in the online marketplace would be very difficult. Amazon posses not only a wealth of experience in the online retail space but the ability to be a loss leader so many Australian e-Retailers may find themselves having to outsmart the champion in other ways.

Keep an eye on how brands like Kogan, The Iconic, Catch of the Day and Shoes of Prey respond to the threat.