From A to Z: Amazon launches in SA, saying competition is good
Takealot, which is under pressure from companies like Shein and Temu, is concerned. By
After months of speculation about a launch date, Amazon finally set up its virtual shop in South Africa this week. Promising same-day and next-day delivery in major centres, more than 3,000 pick-up points, a wide selection of goods and its famous customer-centric service, the American multinational has entered the market months after another leading online retailer, Temu.
Already, it faces stiff competition from local market leader Takealot and newcomers Shein and Temu.
Amazon, the world’s second most valuable and influential brand, will now be selling to local consumers through its Amazon.co.za website, although goods not available in South Africa can still be shipped through Amazon.com.
Previously, orders to South Africa would take weeks to deliver, require customs clearance and attract taxes.
More than 60% of the products Amazon sells globally are from independent sellers, mostly small and medium-sized businesses. In October 2023, the company called for independent sellers to sign up to its platform ahead of its official launch in the country.
It offers two flexible selling plans: individual (for those who plan to sell fewer than 40 items per month) and professional.
Amazon will offer returns within 30 days, 24/7 customer support and free delivery on first orders of products fulfilled by it. It will also offer free delivery for orders valued at more than R500. Return options will include home pick-up and self-drop.
Customers will receive status updates and can track orders. Amazon does this through Whatsapp, which solves one of the biggest irritations of e-commerce: the overly long delivery window.
Customer support is available 24/7 by phone, email and live chat, by teams located in South Africa.
Getting parcels into customers’ hands is likely to be simplified by cutting out the need for delivery windows as much as possible, which is why Amazon is believed to be leaning heavily – at least, at first – on pick-up points and click-and-collect, offered by Pargo.
Pargo is well positioned to offer such services, as it gives customers the option of buying online and having their goods delivered to a central point close to their homes, workplaces or other suitable locations.
Returns are conveyed through the same process.
Pargo has already partnered with major retailers such as
Clicks, Woolworths, Cape
Union Mart and TFG, as well as independent stores.
Robert Koen, managing director of Amazon sub-saharan Africa, told Daily Maverick that these pick-up and drop-off points are available across South Africa, making collections and returns easy for customers.
“You will easily find the locations of the 3,000 pickup points on Amazon.co.za when you purchase products.”
Same-day delivery will only be offered in Cape Town and Johannesburg.
Koen said Amazon launches in countries where it can make a material difference to its customers. “With online retail accounting for around 4% of total sales in South Africa, compared with higher figures in other countries, there’s significant room for growth.
“We are very excited by the opportunity that Amazon brings to local businesses to start selling online, reaching more customers through Amazon, which will support the growth of the digital economy.”
For some products, Amazon is offering a gifting option through gogogogo, a notfor-profit company focused on improving the income and health outcomes of third-generation caregivers (grandmothers) and the children they are raising. Through this partnership, gogos package products in handmade gift bags.
The local website differs from Amazon. com, with a far smaller selection and no gift cards or registry. Koen explained that it is in the early stages of its business in South Africa, so the site will evolve. “We do have Today’s Deals on Amazon.co.za, but this is just the beginning. We will continue to hear from our customers and innovate to bring them the services they care about.”
Koen said Amazon is in South Africa to make investments, create jobs, support local businesses and make an impact on the digital economy. “Competition has been a constant in every country where we operate and we have seen that healthy competition is good for customers, good for businesses, and drives innovation.
Our core value of customer obsession means … we stay focused on the things that matter most to our customers:
low prices, vast selection, fast, reliable delivery and an
overall good experience
“Our core value of customer obsession means we prioritise their needs over focusing on competition, so we stay focused on the things that matter most to our customers: low prices, vast selection, fast, reliable delivery and an overall good experience.”
Meanwhile, Takealot has kept its eye on Amazon’s launch for months. Last month, management conceded that the popular platform was under immense pressure from Shein and Temu, and was concerned about Amazon’s imminent arrival.
This concern motivated Takealot’s Township Economy Initiative, a R150-million partnership between Takealot and the Gauteng government. At the launch, Takealot CEO Frederik Zietsman told News24 they had already seen fallout from Temu’s arrival in January, which has doubled costs since the start of the year.
“And that not only impacts Takealot, it impacts all the small businesses that try to transact online because the cost of acquisition is going up. So, there’s inflationary pressure from these new entrants.”
However, in welcoming the competition, Zietsman said he was confident that Takealot could hold its own against the new competitors by focusing on giving its customers what they wanted and serving them better.
International competition will up the stakes for e-commerce and be good for the consumer, who will have more choice in not only e-tailers, but also in the products and how they are served.