Amazon Prime plans for South Africa

Amazon is busy ironing out the specifics for the launch of Prime in South Africa. That’s the word from Amazon Sub-Saharan Africa managing director Robert Koen, speaking to BusinessTech.

Amazon launched its South African marketplace in May 2024, offering shoppers free delivery on their first purchase and free delivery on orders over R500.

At launch, it also supported 3,000 pickup points, partnering with Pargo and The Courier Guy to offer shipping to lockers nationwide.

However, the lack of Prime and Amazon’s extensive portfolio of Kindle, Echo, and Fire devices on the platform dampened what was otherwise a formidable launch.

In the countries where Amazon has launched its Prime membership, it offers free shipping — including same-day shipping where available.

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.

Amazon Prime Video is currently available in South Africa through a standalone R79 per month subscription.

Launching a more limited local marketplace without much fanfare is not unusual for Amazon.

For example, when Amazon launched its Australian marketplace in December 2017, it also didn’t live up to the hype.

However, Amazon launched its Prime subscription service in Australia six months later.

By December 2018, after a year in the country, the number of products on Amazon had grown from 7.5 million to almost 100 million.

The number of marketplace sellers reportedly also grew from 2,000 to 25,000.

Interestingly, Marketplace Pulse’s research at the time showed that 40% of sellers were Australian locals. The other 60% were mostly from China.

Whether South Africa’s online marketplaces will evolve in the same way remains to be seen.

One industry source with over 15 years of international shipping experience told MyBroadband that South Africa’s market is tiny, and the administrative burden might be too high to attract many international sellers.

“If you’re a marketplace seller and you want to leave stuff at an Amazon warehouse here for Fulfilment by Amazon, you have to get VAT registered,” they said.

This requires sellers to have decent cashflow because they will have to pay tax on stock before they’ve sold it.

One option is for these sellers to use Amazon Easy Ship or Self Ship instead of Fulfilment by Amazon (FBA) to deliver orders and only send a product (and pay tax) when it’s been sold.

Amazon Easy Ship lets sellers store and pack their own products, while Amazon handles delivery.

With Self Ship, sellers can handle their own warehousing, packing, and delivery.

However, poor experiences with non-FBA merchants in Australia resulted in them getting a reputation for bad customer service.

If the same happens in South Africa, shoppers may also avoid merchants that aren’t on the Fulfillment by Amazon programme.

Takealot taking the fight to Amazon

Following the launch of Amazon’s South African marketplace, Takealot immediately launched its own subscription service called TakealotMore.

TakealotMore is offered in two tiers — Standard and Premium — priced at R39 and R99, respectively.

For orders over R500, the Standard subscription includes two free same-day deliveries and collections and unlimited free next-day deliveries and collections on Takealot.

Through Mr D, it also gives one free restaurant delivery with a minimum order value of R150 and free grocery delivery for an order of R350 or more.

The Premium subscription includes unlimited same-day deliveries and collections on Takealot for orders with a minimum value of R500.

All next-day and weekend deliveries and collections are free without any minimum order amounts, and subscribers get ten free standard deliveries for bulky items in a month.

Regarding Mr D benefits, their first five orders of the month with a minimum value of R150 will qualify for free delivery, while free grocery deliveries with a minimum value of R350 are unlimited.

TakealotMore does not offer access to streaming services — one of the major features of an Amazon Prime subscription.

Takealot Group CEO Frederik Zietsman previously said Takealot does not currently plan to launch a streaming service. However, they aren’t ruling it out as a possibility.

Zietsman said Takealot could execute a project of that scale and would work with a partner to achieve it.

He said that instead of creating a Prime clone, Takealot wants to investigate and deploy the services that its customers want the most.

“Maybe South African consumers want something else. Maybe accessible healthcare, maybe content. I’m just saying that streaming is one of the elements that is possible in the future,” said Zietsman.