US e-commerce giant Amazon finally launches in South Africa

American e-commerce giant Amazon has officially launched its online marketplace in South Africa.

The news is set to shake up the local e-commerce market and provide competition to big players like Naspers-owned Takealot.

The launch has been highly anticipated since Amazon announced its plans to expand into South Africa in October 2023. The retailer's services were already available locally via the international platform, but purchases included hefty import duties on products shipped from international depos.

"We are excited to launch Amazon.co.za, along with thousands of independent sellers in South Africa," Robert Koen, managing director of sub-Saharan Africa at Amazon, said in a statement.

Users can shop on the retail site by downloading the Amazon Shopping App or visiting the website on desktop or mobile browsers. The company said its products are from local and international brands across 20 product categories, with options of same-day and next-day delivery or collection at 3,000 pickup points.

Local sellers promised access

Amazon has promised growth opportunities for South African businesses of all sizes, which can now sell their products to customers across the country through the Amazon site.

“Building a strong relationship with South African brands and businesses – small or large – is incredibly important to us. We want Amazon.co.za to be the place where they can reach millions of customers," said Koen.

"Today is only the start of Amazon.co.za. We will continue to improve and enhance our shopping experience to serve customers and sellers across South Africa," he added.

Robert Koen, managing director of sub-Saharan Africa at Amazon. (Source: Amazon)

Amazon said that more than 60% of the items sold in Amazon's stores globally are from independent sellers.

"The company offers independent sellers access to easy onboarding tools, payment processing solutions, and promotional features to help them get discovered by customers, as well as reports and analytics to improve sales," the group said.

South Africa Minister of Small Business Development Stella Ndabeni-Abrahams commented on Amazon's entry into the market, saying the government welcomes companies that provide opportunities for local sellers and entrepreneurs to grow their businesses.

"The heartbeat of our small business enterprises measures the health of our country's economy. If they are pumping, the nation is growing," she said.

"We are counting on Amazon to provide such opportunities to our small enterprises, and look forward to working together to unlock these opportunities. This will create jobs and contribute to government's objective of repairing the legacy of poverty and inequality. This is the heartbeat we want to hear," the minister added.

Amazon has also partnered with goGOGOgo, a South African nonprofit organization, to offer customers the opportunity to package eligible products in handmade gift bags made from recycled plastic.

Based in Johannesburg with projects across South Africa, goGOGOgo aims to build the capacity, skills, and knowledge of grandmothers, known locally as gogos. The collaboration will support local businesses and income-generation opportunities for gogos – with an estimated 4 million children in South Africa currently being raised by their grandmothers.

SA's online retail market growing

Amazon is joining a growing online retail sector in South Africa, which, while still small compared to general retail, has grown steadily over the past few years.

A 2023 study by World Wide Worx and Mastercard showed that the percentage of adult South Africans shopping online shot up from 27% in 2020 to 38% in 2022, a 40% increase in the total number of people shopping online.

SA's online retail market hit the R55 billion (US$3 billion) mark in 2022, accounting for around 4.7% of the total retail market, according to World Wide Worx. This came after 40% growth the previous year, taking the total to R42.3 billion (US$2.3 billion) in 2021.

The 2024 online retail report from World Wide Worx is due to be released this week, with a further uptick in the market expected.

*Top image source: Amazon.

— Paula Gilbert, Editor, Connecting Africa