Amazon South Africa's long-term vision

[Daniel Puchert]

What to expect from Amazon in South Africa

The launch of global e-commerce giant Amazon in South Africa in May this year fell below people's expectations, as it went live without an extensive product catalogue or the company's Prime subscription service.

However, based on how Amazon has entered other emerging e-commerce markets, the best of the American shopping powerhouse is yet to come.

 

[PaulGherkin]

Most Yank companies who enter SA do so for one reason only- to deal with the competition. They're here, likely to buy out TakeaShit and others.

 

[ToxicBunny]

Most Yank companies who enter SA do so for one reason only- to deal with the competition. They're here, likely to buy out TakeaShit and others.

Why would Amazon buy out Takealot, when they can build their brand for less and not have to pay a stupid amount of money for a loss making entity?

 

[Pegging]

Why would Amazon buy out Takealot, when they can build their brand for less and not have to pay a stupid amount of money for a loss making entity?

Distribution channels for one

 

[ToxicBunny]

Distribution channels for one

For a company like Amazon, that can't be difficult for them to setup themselves, as evidenced by what they've achieved in SA already.

 

[Pegging]

For a company like Amazon, that can't be difficult for them to setup themselves, as evidenced by what they've achieved in SA already.

As you can see from the article they haven't done much yet.

 

[ToxicBunny]

As you can see from the article they haven't done much yet.

Really?

They may not have the vast expanse of products yet, or Prime.. but so far their distribution channel seems pretty solid already.

 

[Quicks]

Takealot and Amazon at the moment is basically the same things. Seems they just matching each other prices and that's about it. No reason besides delivery to pick one over the other.

 

[BBSA]

Takealot and Amazon at the moment is basically the same things. Seems they just matching each other prices and that's about it. No reason besides delivery to pick one over the other.

I selected TA because it allows me to utilise my eBucks.

 

[Bernoldus Niemand]

Amazon has Pargo pickup. There's zillions more locations than TAL's pick up points.

 

[BBSA]

Amazon has Pargo pickup. There's zillions more locations than TAL's pick up points.

I really like this, but it's a shame I can't use my eBucks with them.

 

[Curt889]

Havnt even bothered with them.looked at their page the day it opened. Wasn't impressed.pricing wasn't anything great. Website even looked crap.

Couldn't be bothered, will take something like me battling to find something I want then they have it or have it at a better price to change my mind.
But most of time it will always be some underwhelming experience with this sort of thing.

Walmart thought they would come here and kick ass and they didn't.
The way they do business in the US is not the same,customers are different here too.
They learnt a lesson quickly

 

[Tantric Smurf]

For a company like Amazon, that can't be difficult for them to setup themselves, as evidenced by what they've achieved in SA already.

Every region presents unique challenges for Amazon, with the marketplace model differing between Europe and the US. Takealot adopted the European marketplace model, even hiring the individual who established Amazon's European model (currently an executive at Alibaba Europe). While Takealot's implementation varies, Amazon is expected to undergo a similar transition, albeit at a faster pace.

Although specific turnover figures for Amazon SA are unavailable, it is my speculation that even One Day Only still surpasses it until Black Friday. In the landscape of online retail in South Africa, Black Friday turnover serves as a benchmark for the subsequent year, representing a sustained increase rather than a temporary spike that declines quickly.

 

[ToxicBunny]

Every region presents unique challenges for Amazon, with the marketplace model differing between Europe and the US. Takealot adopted the European marketplace model, even hiring the individual who established Amazon's European model (currently an executive at Alibaba Europe). While Takealot's implementation varies, Amazon is expected to undergo a similar transition, albeit at a faster pace.

Although specific turnover figures for Amazon SA are unavailable, it is my speculation that even One Day Only still surpasses it until Black Friday. In the landscape of online retail in South Africa, Black Friday turnover serves as a benchmark for the subsequent year, representing a sustained increase rather than a temporary spike that declines quickly.

No questions that each region provides a unique challenge, but there will be broad strokes that will be the same in every region which Amazon has extensive experience in and at that point it really wouldn't make sense for Amazon to outlay billions of rands to buy a loss making entity like Takealot, rather than spend its money building out its own stuff and not have to deal with any of Takealots technical debt.

 

[Tantric Smurf]

No questions that each region provides a unique challenge, but there will be broad strokes that will be the same in every region which Amazon has extensive experience in and at that point it really wouldn't make sense for Amazon to outlay billions of rands to buy a loss making entity like Takealot, rather than spend its money building out its own stuff and not have to deal with any of Takealots technical debt.

I do agree that Takealot is not in the Amazon cart.

 

[Swa]

Why would Amazon buy out Takealot, when they can build their brand for less and not have to pay a stupid amount of money for a loss making entity?

Only reason would be to poach it.

 

[ToxicBunny]

Only reason would be to poach it.

Poach what specifically?

 

[Swa]

Poach what specifically?

Assets, but more specifically the customer base and lessening the competition.

 

[ToxicBunny]

Assets, but more specifically the customer base and lessening the competition.

I would think the Assets aren't worth as much as you think, it would be warehousing space more than anything else and Amazon would either want their own stuff to run their own systems or they'd lease large scale empty warehousing space for that purpose. It would be expensive to retrofit Takealots warehousing systems into Amazons.

The customer base I think is a possible viable element but even then Amazon have an inherent market penetration purely from the name so don't really think the Takealot customer base is as valuable to them to launch the business.

The competition part is definitely something yeah, but I can only imagine our glorious CC would interfere with such an attempt at a transaction anyway.

 

[Swa]

I would think the Assets aren't worth as much as you think, it would be warehousing space more than anything else and Amazon would either want their own stuff to run their own systems or they'd lease large scale empty warehousing space for that purpose. It would be expensive to retrofit Takealots warehousing systems into Amazons.

The customer base I think is a possible viable element but even then Amazon have an inherent market penetration purely from the name so don't really think the Takealot customer base is as valuable to them to launch the business.

The competition part is definitely something yeah, but I can only imagine our glorious CC would interfere with such an attempt at a transaction anyway.

The primary reason companies poach other companies is because of the competition. Assets are usually a secondary excuse and to make it more palatable. No doubt the CC will have a say but anything is possible. TaL did it with Kalahari.