Amazon plans to launch its online retail business in South Africa next year.
This intention of the e-commerce giant is in some sense a landmark event. The launch of the company’s online retail business in South Africa was long-awaited.
On Tuesday, October 17, the e-commerce giant published an official statement in which it called on potential sellers in the mentioned country to register on the Amazon website. The prospects for the retailer’s specified business in South Africa have been uncertain for a long period and have been complicated by various adverse circumstances, including a dispute with local groups over land for the brand’s offices in Cape Town. Also, in this case, problems with the supply of electricity and poor Internet connection in some areas were unfavorable factors.
This country is a promising market. Currently, there is an increase in the number of citizens in South Africa who belong to the middle-class category in terms of the level of financial and material security. Also, about 65% of the population of this country has access to the Internet. This fact is important from the perspective of online business prospects. Another feature of South Africa is that more people live here in urban areas than in most other States in the region.
In a country where the new form of virtual activity of an American company will soon begin, digital commerce has a share in the structure of retail trade equal to about 4%. This circumstance, according to experts, is evidence that Amazon can make a significant profit by operating in South Africa.
The results of a study by the World Wide Worx market researcher indicate that the volume of retail virtual sales in Africa’s most developed economy showed an increase of 30% last year, which in monetary terms is $ 2.9 billion.
Robert Coen, general manager of Amazon’s business in sub-Saharan Africa, said about the expectation of the launch of Amazon.co.za.
Naspers Takealot, a leading online retailer in South Africa, is strengthening its portfolio ahead of the launch of a new type of activity of the American e-commerce giant, including the introduction of delivery of goods within an hour. Amazon has been providing web services in the country since 2004.
The e-commerce giant has significant advantages in terms of operating internationally compared to its competitors, the main one of which is Walmart. Currently, Amazon’s network covers 22 countries, including Australia, Japan, and the United Arab Emirates.
Some experts say that the e-commerce giant may face significant difficulties when launching an online retail business in South Africa. This opinion is based on the fact that the growth of sphere virtual sales in this country seems to have peaked. Currently, South Africa is experiencing negative trends such as slow economic growth, infrastructure problems, and an increase in unemployment. The mentioned advantages of the country as a market can be offset by these circumstances.
Sasfin Wealth senior equity analyst Alec Abraham says that Amazon is expected to increase competition with local online retailers, but the reality is that the size of the consumer sector in this country is not increasing.
As we have reported earlier, Amazon Develops New Version of Its Cashierless Shopping Technology.