The Australian online retail landscape has just suffered a major blow with the announcement that Catch, a popular online retailer, will be shutting down.
This move comes as a result of increased competition from global giants like Amazon and Temu.
The Reason Behind the Closure
According to Wesfarmers, the parent company of Catch, the online retailer is expected to report a significant operating loss of up to $40 million for the first half of the 2024-25 financial year.
This financial struggle, coupled with the intense competition in the e-commerce sector, has made it difficult for Catch to continue operating.
Job Losses and Restructuring
Unfortunately, the closure of Catch will result in the loss of almost 200 jobs. However, about 100 employees will be retained and reassigned to other Wesfarmers-owned companies, such as Kmart.
The e-commerce fulfillment centers will also be transferred to Kmart, which is expected to benefit from the move.
The Competition Factor
The rise of international competitors like Temu, Shein, and Amazon has made it challenging for Australian online retailers like Catch to compete.
These global giants have a significant scale and network, making it difficult for local players to keep up.
As Harvey Norman founder Gerry Harvey warned, “International players are better able to leverage their global scale, networks, and technologies compared to Australian-owned broad-based marketplaces.”
What’s Next for Catch?
The closure of Catch will take place in the final quarter of the 2024-25 financial year.
Kmart Group Managing Director Ian Bailey believes that the transfer of Catch’s fulfillment centers will result in faster deliveries to customers at a lower unit cost, while also relieving pressure on busy stores.
The Impact on Australian Retail
The collapse of Catch is a significant blow to the Australian retail industry, highlighting the challenges faced by local players in competing with global giants.
As the e-commerce landscape continues to evolve, it will be interesting to see how other Australian retailers adapt to the changing market conditions.