The e-commerce sector in South Africa has been significantly impacted by the much-awaited launch of Amazon’s online marketplace. This development places Amazon in direct competition with established players like Takealot, thereby revolutionizing the digital shopping space.
Amazon’s entry into the South African market, first announced in October, marks a pivotal moment, escalating the rivalry in a market where Naspers-backed Takealot has been dominant. Mamongae Mahlare, CEO of Takealot, expressed a positive outlook on this development last year, stating, “This is a testament to Takealot’s success and the loyalty of our South African customers. It shows that we have built something truly remarkable.”
The timing of Amazon’s entry aligns perfectly with Statista’s prediction of a near-doubling of Africa’s e-commerce market by 2025, reaching $72 billion from $38 billion in 2021. South Africa, leading this growth, has seen a remarkable increase in online sales, with a 66% rise from 2019 to 2020, exceeding $1.8 billion. The sectors leading this growth are clothing and apparel sales, followed by online entertainment, according to the International Trade Administration. Interestingly, SimilarWeb data ranks Amazon as the fourth most visited online marketplace in South Africa, behind Takealot, Temu, and Makro.
As these giants compete for market dominance, analysts predict a fierce battle. Amazon promises an unmatched shopping experience, echoing the sentiments of Robert Koen, Amazon’s Sub-Saharan Africa managing director, who assures “excellent value, a wide selection of local and international products, and a seamless shopping journey.” Shoppers can expect quick deliveries, convenient pickup options, and exceptional customer service, with first-time orders even qualifying for free delivery, according to a statement reviewed by Bendada.com.
In addition to the intense competition, Amazon is using its platform to promote social change. In collaboration with goGOGOgo, a Johannesburg-based non-profit that supports grandmothers (GOGOs) raising children, Amazon allows shoppers to choose unique gift bags. Jane Simmonds, the founder of goGOGOgo, praises the partnership as transformative, stating, “Collaborating with Amazon allows us to expand our impact and improve the lives of GOGOs and the children they care for.” These gift bags, made from recycled plastic and hand-sewn by the GOGOs, not only support local businesses but also provide a source of income for these grandmothers, many of whom are the primary caregivers for their families.
Amazon continues to focus on empowering small-scale enterprises. With over 60% of its global sales coming from independent sellers, Amazon offers a diverse product range while ensuring shopper convenience. Stella Ndabeni-Abrahams, South Africa’s Minister of Small Business Development, shares this view, stating, “The strength of our small businesses reflects the health of our nation’s economy. We welcome companies that offer platforms for local sellers and entrepreneurs to flourish.” She looks forward to working with Amazon to create opportunities for growth, job creation, and economic prosperity.
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