E-Commerce Rivals Put On Notice As Amazon Finally Goes Live In South Africa

By  |  May 7, 2024

Amazon has officially launched its dedicated marketplace platform, Amazon.co.za, marking its entry into South Africa’s burgeoning e-commerce market. The move, Amazon’s first foray into Sub-Saharan Africa, comes amid increasing competition, with local players like Takealot and even global offshore retailers such as Shein and Temu geyeing the growing opportunities.

The announcement, made by Robert Koen, managing director of Amazon Sub-Saharan Africa region, emphasises the company’s commitment to providing South African customers with a seamless shopping experience. With a focus on convenience, Amazon.co.za offers a range of products from both local and international brands across various categories, including Consumer Electronics, Sporting Equipment, Toys, and Home Appliances, while leveraging independent sellers to a significant extent.

“We provide customers with great value, broad selection—including international and local products—and a convenient delivery experience,” stated Koen. “From today, customers can count on Amazon.co.za for a stress-free shopping experience, fast and reliable delivery, access to 3,000 pickup points, 24/7 customer support, and easy returns.”

The South African e-commerce market, though still in its nascent stage, has shown significant growth potential. According to a study by market research firm World Wide Worx, online retail sales in South Africa grew by 30% to ZAR 55 B (USD 3 B) in 2022. This growth trajectory has attracted the attention of global retail giants like Amazon, which see the country as a strategic entry point into the continent.

However, Amazon’s entry into South Africa is met with stiff competition from local players like Naspers-owned Takealot. Phuthi Mahanyele-Dabengwa, CEO of Naspers’ South African unit, expressed confidence in Takealot’s ability to withstand the competition having been bolstered with fresh investment. “We are well positioned toward being able to deal with whatever could be coming from Amazon,” Mahanyele-Dabengwa stated.

While Amazon’s arrival is expected to intensify competition and provide consumers with more choices, analysts remain cautious about its impact on the local industry. Alec Abraham, senior equity analyst at Sasfin Wealth, told Reuters last year that while Amazon may challenge local retailers, the constrained consumer spending and economic challenges in South Africa may limit its immediate impact. “I don’t think their takeover of South Africa retail is a slam dunk,” remarked Abraham.

Despite the challenges which also included a series of delays amid disputes, Amazon’s launch in South Africa is seen as a positive development for the country’s e-commerce ecosystem. Stella Ndabeni-Abrahams, Minister of Small Business Development of South Africa, welcomed Amazon’s presence and reiterated its potential to create jobs and contribute to economic growth. “The heartbeat of our small business enterprises measures the health of our country’s economy. If they are pumping, the nation is growing,” Ndabeni-Abrahams remarked.

Moving forward, Amazon.co.za aims to become a significant player in the South African e-commerce landscape, not unlike in other markets where it has a presence, offering customers convenience and choice while supporting local businesses in their growth journey.

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