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Amazon Plans to Launch Online Shopping in South Africa by 2024
Amazon is set to launch an online shopping service in South Africa in 2024, sparking a clash with an indigenous tribe over a Cape Town office.
Amazon has announced its plans to introduce its online shopping service in South Africa in 2024, marking a significant expansion in the African market. This move will make South Africa the second African country, after Egypt, to have a dedicated Amazon website. Currently, South Africa is Amazon's 21st country with a locally-based domain, presenting a challenge to established online retailers, with Naspers' Takealot.com being a key player.
Analysts have noted that South Africa's advanced economy often serves as a gateway for companies looking to expand across the continent, making Amazon's entry a strategic move. Furthermore, the COVID-19 pandemic has led to a surge in online shopping in South Africa, prompting retailers to increase their investments in e-commerce.
Amazon has opened its platform to independent South African sellers, offering them the opportunity to register their businesses on the online marketplace. The company highlighted that more than 60 percent of its sales come from independent sellers, including small and medium-sized businesses. This presents a wide array of products, competitive prices, and enhanced convenience for consumers.
Despite the promising potential, some industry analysts have raised concerns about Amazon's prospects in the South African market. Sasfin Wealth's senior equity analyst, Alec Abraham, pointed out challenges related to infrastructure, employment issues, and the economic environment that Amazon may face in South Africa. Additionally, homegrown online retailers like Takealot.com already have a significant presence.
The entrance of Amazon into the South African market has drawn attention to the ongoing debate over indigenous land rights and economic development. Protests have erupted, with some advocating for a balance between the two interests. Amazon has been working with the Khoi and San tribes, collaborating with their supporters to create a heritage center as a part of its project.
Amazon's expansion in South Africa also brings the promise of job creation and economic development, which is particularly needed in a city like Cape Town, where unemployment rates are high. The city government expects the project to indirectly generate jobs for thousands of people.
While Amazon's delivery services are not yet available in South Africa, the company has maintained offices in Cape Town for nearly two decades. Additionally, the establishment of Amazon Web Services offices in Johannesburg and Lagos reflects the company's broader retail expansion into sub-Saharan Africa.