Amazon South Africa sputters

Amazon’s long-awaited South African marketplace launch finally came on 7 May 2024, but it has left many shoppers in the country wanting with the lack of its famous Prime subscription and a fairly limited catalogue.

Indications of a potential Amazon marketplace launch in South Africa began to surface in January 2022, when MyBroadband reported that the e-commerce giant was shopping for warehouse space in the country.

Several leaks and rumours followed, but it wasn’t until May 2024 that the marketplace went live.

Two things were evident at the time of launch: the marketplace’s catalogue was very limited compared to other Amazon marketplaces and local online players, and there was no Amazon Prime option in sight.

Orders above R500 made through the platform qualify for free delivery. Amazon will send customers status updates on their orders via WhatsApp. Customers can also contact Amazon via phone, email, and live chat.

Customers who are unhappy with their ordered product can return it hassle-free within 30 days. They can choose from various return options, including home pickup and self-drop.

At launch, it had a limited selection of products from brands like Apple, Sony, LEGO, Pampers, Neutrogena, and Johnson’s, in addition to various local brands.

An early price analysis by MyBroadband revealed that it was still often more affordable to buy tech products from Amazon’s US marketplace and import them than purchasing the same products from Amazon South Africa.

Early customers also voiced their frustration at Amazon South Africa’s prices and the small catalogue of products initially on offer.

“They finally released Amazon in South Africa, and there’s quite literally nothing here,” one user said on X a few days after its launch.

“Amazon South Africa is quite disappointing for me. None of the products we hoped for are on the site, and the ones that are available are overpriced,” another user said.

However, this aspect of its South African operation has improved somewhat, with its catalogue expanding significantly since.

Takealot even acknowledged Amazon’s South African marketplace’s impact on its performance in Naspers’ financial results for the half-year ended 30 September 2024.

Naspers reported that the introduction of players like Amazon.co.za and Temu slowed its growth during that period.

“The business continues to face a slow-growing macroeconomic environment and increased competition from new entrants such as Temu and Amazon impacting Takealot group’s growth, which was 11% revenue growth and GMV growth of 11%, excluding Superbalist,” Naspers said.

Where is Amazon Prime?

Amazon has been quiet about its plans for its Prime subscription service in South Africa, although experts have said it was inevitable that the subscription would launch locally.

In his latest feedback to BusinessTech, Amazon Sub-Saharan Africa managing director Robert Koen said the e-commerce giant is ironing out the specifics for the launch of Prime in the country.

However, Amazon hasn’t provided any further updates since.

In countries where Amazon offers its Prime membership, subscribers get benefits like free shipping and same-day delivery, where applicable, on orders.

Subscribers also get access to discounts and special discount shopping periods, such as Prime Day.

Prime also bundles subscriptions to Amazon’s video streaming service, Prime Video, as well as Prime Music and Prime Reading.

Several e-commerce experts previously said it was inevitable that Amazon would roll out Prime in South Africa, adding that it would possibly coincide with the local marketplace launch.

“If you observe their launch strategies across other markets, they lead with Prime and the associated benefits of the programme,” said TFG Labs co-head and Superbalist co-founder Claude Hanan.

“This is consistent across developed and emerging markets. I see no reason why they would not do the same in South Africa.”

It seems like Amazon will be taking its time in South Africa, as it has been more than seven months since Amazon launched in South Africa, and its Prime membership is still nowhere to be seen.