What if Amazon comes to South Africa – Local ecommerce players respond

Amazon is a tech behemoth on a path to global domination, according to its latest financial results.

The company stated that for Q4 ending on 31 December 2017, net sales increased 38% to $60.5 billion. Operating income also increased 69% to $2.1 billion in the fourth quarter.

For the full year 2017, net sales increased 31% to $177.9 billion, while operating income hit $4.1 billion (down 2%).

A large part of Amazon’s commercial success is thanks to its ecommerce operations, with its online store renowned for a massive catalogue of goods and great prices.

While Amazon does ship certain orders to South Africa, many of its products do not ship directly to the country and require a shopper to use a US-based forwarding service.

With Amazon growing its operations globally and South Africa often seen as the gateway to Africa, the question is: What happens if Amazon comes to South Africa?

If Amazon ever comes

Raru director Neil Smith told MyBroadband that no one knows if and when Amazon might come to South Africa, or even Africa.

“Worrying about a hypothetical is not worth the effort when the South African ecommerce marketplace is already very competitive and something we have to deal with every single day,” said Smith.

He added that if Amazon were to enter South Africa, it “could make things very interesting to say the least”.

WantItAll founder Justin Drennan said Amazon potentially landing in the country may not be the biggest threat to local ecommerce players, and companies like Wish.com could prove competitive.

Drennan said these types of companies focus on a segment of the market in South Africa which has been underserviced and don’t compete on service, but only on price.

“In South Africa, price is a big factor, and in these segments $1 items – with free delivery – are very appealing,” said Drennan.

“If Wish manages to get traction, it could be interesting within a South African context.”

MyBroadband asked several other large local ecommerce players about their stance on Amazon potentially entering South Africa, but they declined to comment.