Amazon has launched its e-commerce store in South Africa, making South Africa the first African country to have the US e-commerce giant operating in. The Amazon South Africa is having 3,000 pickup locations where buyers can pickup their ordered goods.
Stocks available on the Amazon.co.za website are tagged in local pricing, ensuring next-day delivery. In addition, buyers will also enjoy free delivery on their first order to any of the 3,000 pickup locations, including those operated by Pargo and Pudo (the Courier Guy).
In early 2022, news spread about Amazon’s upcoming marketplace launch in South Africa, targeting February 2023 as the debut. Throughout 2023, the company intensified its hiring efforts and finally announced the official launch date in October 2023.
Following the persistent market rumors, Amazon seemed to initiate a soft-launch of the platform, which follows its confirmation last year regarding plans to establish marketplace operations in South Africa. While there were initial reports of intentions to launch in Nigeria as well, these plans were seemingly put on hold at a later stage.
However, Amazon will be competing with Naspers-owned Takealot which accounts for 48% of all online sales in South Africa. Takealot views Amazon’s entrance into South Africa as confirmation of the country’s thriving e-commerce market.
Although, Amazon’s arrival sets the stage for a showdown with local players like Takealot, who know the South African market really well. But Amazon will also have to deal with tough competition rules here, which have forced existing players to change how they work.
For instance, in July 2023, the competition watchdog ordered Takealot to split its retail business from its marketplace. This was to make sure its retail side couldn’t unfairly use info from sellers or block them from selling certain brands.
Yet, even with these challenges, Amazon has its own strengths. It’s already popular in South Africa, with lots of people visiting Amazon.com. Plus, it’s got the money to take on Takealot, which hasn’t been growing as fast lately.
Amazon has a long history in South Africa, especially with its cloud business, Amazon Web Services (AWS). It all started in 2006 when local engineers, under the leadership of Chris Pinkham, created the first Elastic Compute (EC2) instance in Cape Town.
Since then, AWS has set up development and support centers in Cape Town and built data center infrastructure to provide cloud computing services not only in South Africa but also in other African markets.