Amazon is Set to Launch in the South African E-commerce Market in 2024

Amazon has revealed that it will launch its online marketplace in South Africa in 2024.

The marketplace is now available at Amazon.co.za, and independent sellers in South Africa can register their businesses here.

Robert Koen, the general manager of the Sub-Saharan Africa region for Amazon, expressed excitement about this launch, offering local sellers, brand owners, and entrepreneurs an opportunity to expand their businesses and provide a convenient shopping experience for customers in South Africa.

Currently, Takealot, owned by Naspers, is the leader in South Africa’s online retail market with a gross merchandise value (GMV) of R27 billion.

Other players include Makro (owned by Massmart), Checkers Sixty60, and Mr Price. The e-commerce market in South Africa is expected to grow by 11.89% over the next three years, with online retail accounting for an estimated 2% of total sales.

However, high internet and smartphone penetration, along with changing customer behaviour due to COVID-19, are likely to boost this to around 6.8%.

Amazon’s plans to enter the South African e-commerce market were initially reported in early 2022, with a slated launch date in February 2023. In recent months, the company has been recruiting for various positions in South Africa related to the marketplace, signaling its impending arrival.

Amazon’s entry into the South African market comes with regulatory challenges. The country’s competition regulator released a report in July outlining concerns about competitive practices on leading online platforms.

For Takealot, the regulator raised concerns about conflicts of interest between its retail division and marketplace sellers, leading to behaviour that disadvantaged sellers. As a remedy, Takealot was ordered to separate its retail division from its marketplace operations.

These regulatory concerns will also affect Amazon, as it operates both its own retail division and a marketplace for third-party sellers.

In South Africa’s e-commerce industry, factors like competition and regulation will play a significant role in shaping the future, involving established players like Takealot and Massmart, as well as newcomers like Amazon.