Amazon makes landmark entry into South African market
The highly anticipated Amazon South Africa store went live on Tuesday on Amazon.co.za, opening the online store to South African customers for the first time.
Shoppers can access the service by either downloading the Amazon Shopping App or visiting www.amazon.co.za on desktop or mobile browsers, customers can now discover and shop from a selection of local and international brands across 20 different product categories and enjoy same-day and next-day delivery.
The US e-commerce giant launched with some incentives to consumers including free delivery on their first order, followed by free delivery for subsequent orders above R500 (about $27).
“We are excited to launch Amazon.co.za, along with thousands of independent sellers in South Africa. We provide customers with great value, broad selection—including international and local products—and a convenient delivery experience,” said Robert Koen, managing director of Sub-Saharan Africa, Amazon.
“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. Customers will also enjoy free delivery on their first order.”
My African Magazine managed to go through the store and we noticed that Amazon South Africa was as of now, offering the same products as Takealot’s — probably their biggest competitor.
Takealot.com is a South African e-commerce company based in Cape Town and is currently regarded as South Africa’s largest online retailer.
A large number of listed products on Amazon.co.za were also labelled as out of stock – something expected as it is still early days.
However, considering Amazon’s financial muscle, it may be a matter of time before Takealot is suffocated out of business.
Business writer Tinashe Muguko (@tmugoko) provided shoppers with some facts about Amazon
Must-Know Facts about Amazon by Tinashe Mugoko
1. Amazon is huge. Its revenue is bigger than South Africa’s GDP, and its market cap dwarfs the entire JSE. It’s also about 50 times bigger than Naspers, Takealot’s owners. This means deep pockets for price wars if needed.
2. Amazon is wildly popular in the markets it operates. In the US, more households are subscribed to Amazon Prime (its monthly subscription service) than own a pet or voted in the US elections. If a similar Prime offering is available in SA, I think many people will sign up.
3. One of Amazon’s values is “Customer Obsession” which they really live by.
For example, you could email Jeff Bezos (Founder) with a complaint, and get a response. I’m not sure Jeff Bezos read the emails, but it was still quite impressive.
4. Amazon has always focused on the long term. The foundation of this was the 1997 letter to shareholders that Jeff Bezos wrote where he told shareholders “It’s all about the Long Term.” This means for South Africa; Amazon is here to stay.
This is good news for South Africa, as Amazon is aware of the challenges that emerging markets bring and will invest in building infrastructure. Jess Bezos himself mentions this in a 2022 Shareholder Letter. Ironically, this will also benefit competition like Takealot.
5. Amazon’s online store is not actually its best business. Whilst Amazon’s online store is the most well-known, its best business is Amazon Web Services (AWS) which makes up over 70% of its operating profit. AWS already has a significant presence in South Africa.
AWS is probably Amazon’s biggest opportunity in Africa and it has already committed to investing R30 billion ($1.6 billion) in South Africa. That’s what’s interesting about many world-leading companies. How they make money is often not as obvious as you would expect.
