Amazon launching in South Africa in 2024 — what to expect from prices, delivery, and products

Amazon’s South African marketplace is launching in 2024, and there are several of its major strengths in other markets that it could leverage to gain a foothold in South Africa’s e-commerce space.

The world’s biggest online retailer is one of the most valuable companies in the world and helped propel its founder, Jeff Bezos, to top the list of the world’s wealthiest people for several years.

Amazon’s highly recognisable brand gives it a boost to take on a market brimming with competition, such as Takealot, Bob Shop, TFG Group’s Bash, Walmart-backed Makro and Game, and many smaller niche players.

South Africa’s biggest online retailer, Takealot, seems keenly aware of the threat Amazon poses to its business.

Although the company is yet to post a profit, its parent recently revealed it is pumping more money into its local e-commerce operations.

However, several e-commerce experts, including Bob Group managing director Andy Higgins, have said that Amazon has its work cut out in establishing a foothold in South Africa.

MyBroadband contacted Amazon for comment on its plans, but the company said it was still in the early stages of its local rollout and would only provide further feedback closer to launch.

Below are four key strengths of Amazon.com’s offering that could shake up e-commerce in South Africa.

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Highly competitive (but not unbelievable) prices

Amazon is well-known for its blockbuster deals, including during its Prime Day and Black Friday promotions.

Its extensive selection of sellers in the US compete heavily on price to be most likely to sell a product.

E-commerce software company uAfrica.com co-founder Jaco Roux,  previously told MyBroadband South Africans should not expect Amazon to blow them away with huge deals from the get-go.

“This will not be a price war, but an inventory war — who has the best options for buyers?” Roux said, referring to Amazon’s primary area of competition with incumbents.

However, TFG Labs co-head and Superbalist co-founder Claude Hanan said that pricing would “probably” play an important role in Amazon’s South African strategy.

“The Amazon playbook, per founder Jeff Bezos, has historically been ‘your margin is my opportunity,'” Hanan explained.

“If that remains part of their Africa strategy, then the pricing landscape will likely be impacted.”

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Prime subscription service

While South Africans can currently subscribe to Amazon’s Prime subscription service, they are unable to enjoy its full suite of benefits, such as fast and free one-day and same-day delivery.

In the US, Amazon also offers “Buy with Prime”, which lets customers shop directly from a seller’s store while being able to use Amazon’s checkout and delivery services.

Other benefits of Prime in Amazon.com markets include:

• Prime Video subscription — Access to Amazon’s video streaming service. Currently available in South Africa for R79 per month standalone.
• Prime Reading subscription — Access to over a thousand books, magazines, comics, and other reading material on Kindle apps.
• Amazon Music — Access to Amazon’s music streaming rival to Spotify, YouTube Music, and Apple Music, with over 100 million songs in its catalogue.
• Prime Gaming subscription on Twitch — Access to select games and gaming benefits, as well as a range of Twitch perks.
• Amazon Day — Choose a specific day in the week to receive your packages.

Both Hanan and Roux told MyBroadband they believe that a local version of Prime will be available when Amazon.co.za launches.

“If you observe their launch strategies across other markets, they lead with Prime and the associated benefits of the programme,” Hanan said.

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

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Fast delivery times

Amazon is likely to ensure its logistics are in perfect order before launching locally, as it would want to avoid the bad press that can come with delayed or poor delivery services.

The company currently ships around 1.6 million packages daily, over 1,000 every minute.

Amazon has already acquired warehousing space for fulfilment centres in Kempton Park in Gauteng and Montague Gardens in Cape Town.

Amazon.com places a heavy emphasis on fast delivery, which has sometimes drawn negative press for the pressure it puts on drivers.

In the US, Amazon.com has its own vehicles and staff to deliver parcels.

However, it also uses third-party logistics and delivery companies to handle some of its international fulfilment.

Since it will require a substantial investment in vehicles and training for drivers to rely only on its own logistics, Amazon will likely use courier partners in South Africa.

A source familiar with the matter previously told MyBroadband he believes Amazon will use electric VW ID.Buzz Cargo vans for its local deliveries.

Within weeks of receiving that information from our source, news emerged that DHL South Africa was testing a fleet off our such cars.

DHL is one of the third-party logistics fulfilment companies that Amazon works with.

Further supporting the intention to use these vehicles is that Amazon wants to decarbonise its delivery fleet by 2040.

Therefore, launching in a new market with non-electric delivery vehicles would not make sense.

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An extensive product range — including Amazon-made products

Amazon.com’s vast product selection is part of what makes it very appealing in the US and other markets.

According to RepricerExpress, the company sells roughly 12 million items directly. Including items from resellers pushes that up to 350 million.

Over 60% of Amazon’s sales come from independent sellers — mostly small and medium-sized businesses — who benefit from the company’s strong logistics, robust customer service, and extensive reach.

The company has already launched a dedicated portal for signing up as a seller on Amazon.co.za.

Key to attracting sellers will be offering low commission fees on every product sold.

If sellers pay less on commission, they can either make more profit or reduce the prices of their products so that they are more attractive to buyers, boosting sales.

It will also be interesting to see whether Amazon will directly sell some of its own products on its South African marketplace.

While South Africans can currently shop from the US Amazon.com marketplace, there are numerous products from brands owned by its parent company that don’t ship directly to our shores.

This includes the Amazon Echo and Ring smart and security devices, as well as a range of budget-beating TV brands like Insignia and Vizio.

The Amazon Basics brand also offers a wide range of highly affordable general household items, including electronics, kitchenware, bathroom items, fitness equipment, and pet products, to name a few categories.