Amazon is shopping around for warehouse space in South Africa, leading to industry speculation that the company could be looking to enter the local ecommerce sector, a source has told MyBroadband.
The retail giant’s plans for the warehouses are unknown, and it has not responded to MyBroadband’s request for comment.
A source with deep knowledge of South Africa’s ecommerce industry has cautioned not to leap to conclusions about Amazon’s interest in local warehousing.
Every year for the last 12 years, there have been rumours that Amazon is coming to South Africa based on incomplete information.
Where speculation was rife that Amazon was entering online retail in South Africa more than a decade ago, the company instead launched a local call centre to provide support for its products to customers worldwide.
However, the company’s interest in South African warehouse space remains a fascinating development.
Should Amazon be looking to launch a local ecommerce presence in South Africa, it is expected to go one of two ways — it could acquire an already-established local company, or enter the market directly.
Many South African ecommerce players are hoping for a buy-out offer from Amazon, as competing against the global retail giant is seen as a losing battle.
According to an industry source, Amazon is already causing concern for some local retailers through its importing service into South Africa.
Amazon offers seamless importing for South African shoppers by estimating taxes and import duties for items it can ship to the country.
It provides a guarantee on this cost estimate. If taxes end up lower, Amazon repays you the difference. If taxes are higher than estimated, Amazon eats the loss.
A recent example where Amazon bought out a local player is Souk.com, which was the largest ecommerce platform in the Arabic-speaking world.
Between 2019 and 2021, Amazon rebranded Souk’s UAE, Saudi Arabia, and Egypt operations to Amazon.ae, Amazon.sa, and Amazon.eg.
Amazon Egypt is the company’s only African retail presence so far.
Amazon.co.za currently redirects to the main Amazon.com website.
Naspers and Tiger Global Management owned Souk.com before Amazon acquired it in 2017 for an undisclosed amount.
Subsequent reports stated that Amazon paid $580 million cash for Souk.com — around R7.6 billion at the time.
Naspers is the majority owner of Takealot Group in South Africa after buying out Tiger Global Management’s stake in April 2017.