Amazon confirms launch and opens up registration for businesses to sell on amazon.com/south-africa.
Global online retail and tech giant Amazon on Tuesday finally officially confirmed that it will be launching Amazon.co.za in the South African market in 2024.
The move is likely to shake up the local bricks-and-mortar and online retail sector, putting further pressure and increased competition on traditional retailers like Pepkor, Pick n Pay, Mr Price, Shoprite, TFG, Woolworths Massmart and Retailabilty, as well as Naspers-owned Takealot.com. Local consumers and shopaholics, however, stand to benefit from wider choice and hopefully better prices.
The share prices of all the major retailers listed on the JSE were down by midday on Tuesday, following Amazon’s announcement. SA tech giant Naspers and its sister company Prosus were both also trading around 2% weaker.
Amazon, which already has a strong presence in SA through its Amazon Web Services (AWS) tech business and operations in Cape Town and Waterfall City, said in a statement that Amazon.co.za would provide South African-based sellers the ability to reach customers across the country.
“More than 60% of sales in Amazon’s store are from independent sellers – most of which are small and medium-sized businesses – providing a vast selection of products, competitive prices, and great convenience for consumers,”
it said.
In July, the Competition Commission of South Africa released its Online Intermediation Platforms Market Inquiry (OIPMI) final report. The report listed the actions that platforms and certain companies must take to address anticompetitive factors identified in the market.
In particular, the Commission ordered Takealot to split its marketplace business from its retail business so that it could not use its position as a dominant marketplace to promote its own retail products. Some experts say the Commission's requirement will make it harder for Takealot to compete with a powerful player like Amazon.
In June 2022, Amazon announced plans to expand into five African, European, and South American countries — Belgium, Chile, Colombia, Nigeria, and South Africa. The e-commerce giant confirmed its African project, codenamed "Project Fela," two months later by registering the domains "Amazon.com.ng" and "Amazon.co.za".
However, Amazon announced plans to lay off 18,000 employees in January 2023, delaying the launch due to the downturn in the tech industry.
Source: Moneyweb
