E-commerce giant Amazon has finally set foot in Africa, launching its online marketplace in South Africa on Tuesday.
Being the first Amazon marketplace on the continent, the platform will face competition from established local players like Takealot and bidorbuy.
The South African e-commerce market is estimated to be worth $3 billion annually, attracting Amazon despite the absence of its popular Prime membership program at launch.
This means no access to Prime’s media services, free shipping perks, or other features that encourage repeat business on Amazon’s platform.
Amazon plans to entice customers with a wide selection of products, including both international brands and locally sourced goods across 20 categories.
The company is offering same-day and next-day delivery alongside a network of 3,000 pickup points. To further incentivize purchases, Amazon is providing free delivery on all first orders and subsequent orders exceeding R500 (around $27).
Local entrepreneurs view Amazon’s arrival as a positive sign for the overall strength of South Africa’s e-commerce market, which has seen some fluctuations after a pandemic-driven boom. “Competition is good news,” said Francis Dufay, CEO of Jumia, another e-commerce player in Africa. “It validates the opportunity of African e-commerce and helps grow the market.”
However, Amazon’s entry has been a long time coming. The company initially announced its African expansion plans two years ago, targeting both Nigeria and South Africa.
The launch has been repeatedly delayed, with the South African debut originally planned for April 2023. While independent seller onboarding began in October 2023, the full marketplace launch only materialized this week. The planned Nigerian launch also remains on hold.
Despite the delays, Africa presents a huge growth opportunity for Amazon. The continent’s digital commerce sector is still in its early stages, offering extensive potential for future expansion.
While challenges in supply chain logistics and consumer behaviour conversion exist, Africa’s untapped market holds more promise than saturated markets elsewhere.
“We are excited to launch Amazon.co.za alongside thousands of South African sellers,” said Robert Koen, managing director of Sub-Saharan Africa for Amazon. “We aim to provide South Africans with great value, a broad product selection, and a convenient delivery experience.”
Amazon is placing a strong emphasis on building relationships with South African businesses of all sizes, aiming to make Amazon.co.za a platform for them to reach millions of customers.
The arrival of Amazon adds another competitor to South Africa’s R55 billion e-commerce space, currently dominated by Naspers-owned Takealot.
Walmart-owned Massmart is also preparing to enter the online market, further heating up competition. With the pandemic driving a surge in online shopping, Amazon’s launch coincides with a prime opportunity to capture a share of this growing market in South Africa.
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