SA seen as ripe for expansion by Amazon

01 April 2018 - 00:24 By PALESA VUYOLWETHU TSHANDU

The story of Amazon's disruptive retailing model has for the most part played out in the developed world but some market commentators suggest the company, one of the world's largest, might soon enter the South African market.
Nivindya Sharma, director of retail strategy and insights at trend forecaster WGSN, said Amazon had the potential to rapidly capture a huge share of the South African market.
It "creates an ecosystem for local and international brands who want to sell on a platform without actually opening shop in the country", Sharma said.
Amazon Web Services already has offices locally. The parent company was not available for comment.
Destination for retailers
Over the past decade, South Africa has attracted some of the world's leading retailers, such as H&M.
Falling sales in their home geographies have forced these retailers to seek emerging-market opportunities. Five of South Africa's major retailers, including Shoprite, Pick n Pay and Woolworths, are among the world's top 150 retailers.
While Amazon does ship certain orders to South Africa, for many of its products consumers need to use a US-based forwarding service.
South Africa's e-commerce sector is still in its infancy, contributing a mere 1% of overall sales, but it is growing.
Michael Treherne, a portfolio manager at Vestact, said that in South Africa Amazon could leverage off existing infrastructure from e-commerce retailers.
"When Amazon launches here, maybe they would buy out Takealot with their existing infrastructure," he said.
"The bigger challenge will be converting people from brick-and-mortar to online and that will only happen as infrastructure improves as internet access gets cheaper. The internet in South Africa is still very expensive."..

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