Makro is getting ready for Amazon’s launch in South Africa
Despite Makro-owner Massmart’s billion-rand loss over the 26 weeks ended 26 June 2022, its online platforms have performed well, and it believes it will be prepared to compete with Amazon if it launches a marketplace in South Africa.
MyBroadband asked outgoing Massmart CEO Mitchell Slape for his thoughts on Amazon’s impact through its potential marketplace launch in South Africa.
“There is no question that Amazon is going to intensify competition in the market,” Slape said.
“Toward that end, we have been working hard to build our ecommerce business over the last few years … and we’ll continue to drive that forward.”
This was evident in Massmart’s interim results, which revealed a 50% increase in ecommerce sales compared to the same period last year.
The results also showed that orders on its ecommerce platform increased by 109%, and gross merchandise value grew 108% over the same period.
“We think we’ll have a very competitive and interesting offer for our consumers, and you’ll see more of that in the coming months,” Slape added.
Editorial credit: Cineberg / Shutterstock.com
MyBroadband first reported that Amazon could be looking to launch in South Africa in January 2022 when an industry source revealed that the company was searching for warehouse space.
In June 2022, leaked documents revealed that Amazon wants to expand its operations to five new countries in Africa, South America, and Europe.
Its expansion plans include launching a marketplace in South Africa and Nigeria under the codename “Project Fela”.
More recently, an “Amazon.co.za” option was discovered in an Amazon Marketplace support drop-down menu, suggesting the international ecommerce giant could be gearing up to provide a South African support line.
Amazon.co.za currently redirects to Amazon.com.
Another sign that Amazon could soon launch a South African marketplace was discovered in its local job listings.
Amazon is currently hiring for two managerial positions relating to a “ZA marketplace”.
The first is a “Manager — ZA marketplace” position, and the second is for a “Strategic accounts manager — ZA marketplace” role.
Takealot Group CEO Mamongae Mahlare described the possible launch of Amazon’s South African marketplace as a “compliment” to Takealot and its customers.
“It’s a great compliment to Takealot and the people that have built this business to where it is today, and our customers in South Africa that have supported that growth,” she said.
“It demonstrates that we have built something that has built an investment case good enough for global companies like Amazon to want to come here.”
When asked whether Takealot owner Naspers would be willing to enter into a “digital war” with the global commerce giant, Mahlare maintained that Naspers has invested in Takealot for the long run and held a long-term view of the company’s potential.
As Slape mentioned, Massmart has been working to bolster its ecommerce platforms for some time now.
In August 2021, Slape said Massmart was already the second-largest online retailer in South Africa and that he saw a substantial opportunity for further growth.
To help achieve its goals, Massmart hired John Sylvester, the former Walmart North America VP for last-mile delivery, to lead its ecommerce team.
Sylvester said Massmart was well-positioned to be a more effective ecommerce player thanks to its brands, wide range of products, and brick-and-mortar store base.
Massmart has also been working with Walmart’s technology to improve its online experience for customers and recently increased its stake in the last-mile delivery platform WumDrop to 100%.
Makro said the move would help it reduce its 3-5 day delivery lead time promise to just two days for deliveries within 30km from any store.
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