Global e-commerce juggernaut Amazon has officially announced its entry into the South African market. The e-commerce giant is set to unveil its marketplace on Amazon.com.za, commencing October 17, 2024, providing a platform for local independent sellers to register their businesses on sell.amazon.com/south-africa.

Amazon’s move into South Africa is geared toward offering local sellers, brand owners, and entrepreneurs, regardless of size, the opportunity to expand their businesses and provide a convenient shopping experience for customers across the nation, as expressed by Robert Koen, General Manager of the Sub-Saharan Africa region for Amazon.

At present, Naspers-owned Takealot dominates the South African online retail sector with a gross merchandise value (GMV) of R27 billion. Other prominent players in the South African e-commerce arena include Massmart-owned Makro, Checkers Sixty60, and Mr Price. Recent data from Statista projects an impressive 11.89% growth in the e-commerce market over the next three years. Although only about 2% of retail sales are currently conducted online, the convergence of high internet and smartphone penetration and shifts in consumer behavior catalyzed by the COVID-19 pandemic are anticipated to boost this figure to around 6.8%.

Speculation about Amazon’s impending South African marketplace launch began to circulate in early 2022, with February 2023 initially marked as the target launch date. In recent months, the company has been actively recruiting in South Africa, particularly for roles related to merchant development, software development, and operations, signaling its imminent entry into the market.

Amazon’s South African entry comes at a time of heightened regulatory scrutiny in the e-commerce sector. In July, the country’s competition regulator released a report outlining an investigation into the competitive practices of some leading online platforms. Notably, for Naspers-owned Takealot, the regulator identified a conflict of interest, highlighting that the platform’s retail division competes directly with its marketplace sellers, resulting in actions that disadvantage these sellers.

In response, Takealot was mandated to separate its retail division from its marketplace operations. This measure effectively prohibits its retail services from accessing seller data and prevents sellers from unilaterally competing for certain brands. Amazon could face similar challenges as it operates both a retail division and a marketplace for third-party sellers in South Africa.

The South African e-commerce landscape is on the brink of a transformative period. Fierce competition and heightened regulatory scrutiny will shape the future of the sector, impacting established players like Takealot and Massmart, as well as newcomers like Amazon. These dynamics collectively create a dynamic environment for growth and innovation within the South African e-commerce sector.