Amazon announces its expansion with Amazon.co.za next year, focusing on emerging markets.
In a move highlighting their growing focus on emerging markets, Amazon recently announced its plans to launch Amazon.co.za in South Africa in 2024, sending ripples through the online retail and software space in the country.
“We look forward to launching Amazon.co.za in South Africa, providing local sellers, brand owners, and entrepreneurs — small and large — the opportunity to grow their business with Amazon,” said Robert Koen, General Manager of the sub-Saharan Africa region for Amazon, in a press release today.
This expansion into South Africa underscores the company’s belief in the untapped retail potential of the region and the developing world more broadly, announcing in 2022 its plans to also launch in Belgium, Chile, Colombia, and Nigeria. The South African launch has not been without its challenges.
The company reportedly faced legal challenges to its development of the Amazon Development Centre in Cape Town by indigenous peoples but was greenlit late last year.
As a pioneer in e-commerce, Amazon’s entry is an endorsement of South Africa’s growing online retail space. With more than 60% of Amazon’s global store sales coming from independent sellers, the platform aims to empower South Africa’s small and medium-sized businesses by providing a variety of tools, educational resources, and a vast consumer base.
Local companies like African Mamas Crafts and Reader’s Warehouse are already excited about leveraging Amazon’s platform for growth. This suggests that Amazon sees South Africa as more than just a market — it’s a landscape ripe for collaborations and partnerships.
However, Amazon’s journey to launch in South Africa hasn’t been a cakewalk. The company now faces competition from established local online retailers like Takealot.com, as well as challenges related to South Africa’s infrastructure, employment issues, and economic landscape.
In terms of leveraging local resources, Amazon is not entirely a newcomer to South Africa. Through its Amazon Web Services (AWS) subsidiary, the tech giant already has a significant presence in the country, including development and support centers in Cape Town. AWS recently launched the first international AWS Skills Center in Cape Town, providing cloud computing education. These initiatives could serve as foundational blocks for Amazon’s e-commerce operations, helping the company better understand and serve the local market.
Amazon’s South African entry could also pave the way for the introduction of ancillary services and products. According to reports, the company plans to offer its popular Prime loyalty program, featuring expedited delivery and access to Prime Video and Twitch. Given that Prime has been a major driver of customer loyalty and engagement in other markets, its introduction could significantly alter the competitive dynamics of the South African e-commerce landscape. Leveraging its existing AWS infrastructure and partnerships with local businesses, Amazon is positioning itself not just as a retailer but as a significant contributor to South Africa’s digital ecosystem. As Koen emphasized, the launch aims to provide “great value and a convenient shopping experience” while opening new avenues for local businesses to flourish.