US internet giant Amazon launched in Australia Tuesday in time for Christmas, with retailers scrambling to cut costs and boost their online offerings as they brace for an expected shake-up of the sector.

The arrival of the behemoth -- which has grown from an online bookstore to one of the world's largest firms -- poses a threat to a market already grappling with weak consumer confidence amid tepid wages growth.

The American giant is offering "millions" of products from well-known Australian brands, as well as small and medium-sized Australian businesses selling on Amazon Marketplace.