Amazon’s South African Launch: E-commerce Growth South Africa

October 2, 2024

Amazon has committed to opening its South African E-Commerce operations in 2024. Below I cover 5 hot topics for business owners and other interested parties to consider:

E-commerce Growth in South Africa

Online sales comprise circa 6% of retail sales in South Africa, which is a relatively low percentage compared to more developed nations where near 20% of retail sales are completed online. This lower base enables growth in E-commerce in Africa’s most industrialised nation to exceed that of the international average.

Despite structural economic and socio-political challenges, one may retain a careful optimism when considering the young rainbow nation’s future. Consumer consumption comprises the largest contributor to most every economy’s GDP, and the convenience and effectiveness of E-commerce explains why online sales continue to capture a growing share of a nation’s retail sector.

Amazon is bullish on South Africa

Amazon has had its eyes on an African entrance for at least a few years. With interest in Nigeria, and others, it speaks volumes that South Africa was the chosen point of entry. Amazon generates more revenue in one year than the entire GDP of South Africa, and boasts a nearly ubiquitous presence in the developed world. I trust that Bezos and his team knew what they were doing when they carefully chose South Africa as its newest country to penetrate.

They know the economic landscape from their web services and call-centre operations which have been held in S.A. for years. And despite the global economic recession restraining their opening in Nigeria, Amazon has committed to opening in South Africa this year!

Amazon's Competition with Takealot in South Africa

Amazon’s opening in South Africa does not spell out a death sentence for Takealot… yet. The Naspers owned E-commerce platform launched in the early 2010’s and has been the dominant online sales platform in South Africa. Today the site gets up to 10 million visitors daily and while they are still running at a loss, the group generates double digit growth and remain profitable at an operational level.

Takealot has welcomed the challenge brought by Amazon and have seen increased investment from Naspers to help them compete with the original E-Commerce behemoth. The increased competition may benefit the South African consumer as the companies strive to offer more products, lower prices, and faster delivery. Amazon’s deep pockets, industry expertise, and prestige status will certainly position it to dig into Takealot’s market share in the years to come.

The opportunity for South African businesses

Expanding your businesses operations to include Amazon grants you access to a marketplace of over 300 million people. Even within South Africa, some consumers exclusively shop online and unless you are positioned on the leading platforms, you will miss out on their demand. As E-Commerce continues to grow it becomes increasingly foolhardy for a business owner to ignore its opportunity. The trends of this growth are clear, and by launching on Amazon, South African firms will be able to internationalise with unprecedented ease.

Amazon will only open once – take the first mover advantage

When Amazon.co.za launches it will be relatively unsaturated and allow for firms to cement their spot in the rankings with less competition. Big and small companies can benefit from this, as they can spend less on advertising and still secure a favourable spot in Amazon’s algorithms. Take the chance right now, as it will never happen again.

fluid/sa is a full service Amazon agency, expanded from Europe and the USA to offer its expert services to South African businesses. Consult with us today to start your Amazon journey. Get a free consultation today!