Amazon South Africa ready to take on Takealot

  • Amazon has finally confirmed that it will launch an online retail division in South Africa come 2024.
  • The biggest name in international ecommerce is looking for small local businesses to join its marketplace when it opens next year.
  • Amazon will enter an SA hungry for etail and will face off against dominant player Takealot.

The biggest name in international ecommerce, Amazon, after years of speculation, has finally confirmed that it will launch in South Africa in 2024 effectively throwing a massive boulder in the reasonably calm waters of the local market.

Potential customers can expect to head to come next year to begin ordering items from the ecommerce giant. In 2021 the company was embroiled in a fight against environmental activists who wanted to block the construction of its local headquarters in Cape Town, but since then no solid plans for a local launch were made public.

“Today, Amazon announced that it will launch in 2024, providing South African-based sellers the ability to reach customers across the country starting next year,” Amazon details in a press release sent to Hypertext.

The company is allowing independent sellers in South Africa to register their businesses and products on the platform starting today.

It says it has already onboarded Johannesburg’s African Mamas Crafts and discount book store Reader’s Warehouse. Customers can expect to see products from these two sellers on the local platform next year, as Amazon seems to be focusing on charming smaller businesses to sell on its marketplace.

“Amazon offers a range of valuable tools, programs and services to empower sellers and foster their business growth, including hundreds of thousands of hours of free educational content to support sellers at every stage of their journey, including articles, videos, webinars and case studies,” it adds.

“We look forward to launching in South Africa, providing local sellers, brand owners, and entrepreneurs – small and large – the opportunity to grow their business with Amazon, and delivering great value and a convenient shopping experience for customers across South Africa,” said Robert Koen, general manager of the Sub-Saharan Africa region for Amazon.

Come 2024, Amazon will enter a South African market that has fully embraced online retail. In 2022, analysts from Infobip foresaw the local ecommerce market to be worth $75 billion by 2025, WorldWideWorx predicted it was already worth $55 billion as of last year.

Amazon head to head against Takealot

The entrance of Amazon could not have come at a worse time for market leader Takealot, which has been struggling to maintain growth for some time.

In its last financial report, owner Naspers indicated that Takealot lost $22 million due to wildly rising inflation, climbing interest rates and slowing consumer demand – which is reflected worldwide.

Loadshedding also hampered Takealot severely, with Naspers telling shareholders in June that escalating fuel prices and other operational costs continue to affect profitability.

Increased competition from a slew of smaller local players, and the likes of Massmart’s Makro have kept the firm on its toes. For example, retailing rival Shoprite has seen rapid enormous growth in its popular Sixty60 online grocery delivery platform. Sales on the Sixty60 app increased by 81.5 percent over the last quarter.

With loadshedding expected to ease somewhat as of next year, and a market hungry for convenient shopping at the ready, time will tell if Amazon can replicate its magic in South Africa, the same magic that saw it make $7.7 billion in the second quarter of 2023.

[Image – Provided]


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