Amazon, the world's largest e-commerce company, has launched in South Africa. That should be good news — but not everyone is excited, as there are fears it could also lead to the collapse of local online retailers.
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00:00Amazon, possibly the biggest online shopping company globally, has started operating in South Africa.
00:09This means that customers in South Africa can now shop from a wide variety of local and international brands
00:15with just a tap on their phone and have it delivered to their door.
00:19But should this launching be celebrated or is there a hidden danger like a Trojan horse lurking behind it?
00:25Welcome to The Flipside.
00:27South Africa is one of the top 42 largest e-commerce markets globally.
00:32According to data released by Worldwide, Worex and Mastercard, e-commerce grew by 25% in 2023.
00:39A Deloitte study also found that more than 70% of South Africans shop online at least once a month.
00:46It is convenient for them.
00:48The 2020 COVID pandemic created the opportunity for online shopping to finally take hold in the country.
00:55So it obviously makes sense that Amazon has now launched its online shopping service in South Africa.
01:01So how big a deal is this for South Africa?
01:05It registers in the international market that Amazon is entering into the African market and they are starting from South Africa.
01:13So at least it gives them some advantage in terms of the e-commerce ecosystem in Africa.
01:23Well, Amazon is offering same-day delivery, the next-day delivery with more than 3,000 pickup points.
01:30Shoppers will get free delivery on first orders, followed by free delivery for subsequent orders above 27 US dollars.
01:38But Amazon is also entering a space dominated largely by local e-commerce companies such as Techalot.
01:46Many online retailers are still in their infancy hoping to thrive.
01:51But they do not have the financial muscle to tussle with what Amazon is promising.
01:57It's not necessarily a good thing for small businesses like my own because they have more resources than we do and they most probably have lower prices than we do.
02:10But is it all doom and gloom for these small local online retailers or there is opportunities for them to remain in the business and even grow?
02:19They must find a way of maybe coming together, you know, to own some blocks of maybe locations or regions or whatever.
02:28So that a particular niche market that they are very, you know, competent in.
02:33So Amazon cannot even compete with them in that space.
02:36You see, e-commerce has come to stay for sure.
02:39With the power of the internet, the future of this business can only get better for both consumers and service providers.
02:46Perhaps African countries need proper regulation of the sector to protect local retailers while opening up for global investment.
02:54And that is the flip side.