Amazon is progressing with its plans to launch a marketplace in South Africa, as the company recently started hiring for a number of marketplace-related roles. While the company is yet to make any official announcements regarding a launch date, it is hard to see how this could happen before Q1 2024. Amazon still has to hire a team, establish vendor relationships, onboard sellers and fill a warehouse with stock; this takes time.
The launch of another marketplace in SA is a net good for sellers. Not only will Amazon be growing the e-commerce pie by getting more consumers to purchase online in South Africa they’ll also be providing sellers with an additional channel to sell on.
What to expect when Amazon launches their Marketplace in South Africa?
Despite their brand power, Amazon is going to have to put up a good fight to win market share from Takealot. One can easily overlook the world-class last-mile delivery network that Takealot has built. This is something that Amazon won’t have on day one and Takealot knows this. It’s the reason Takealot is pushing next-day delivery. E-commerce customers care more about how quickly they receive their orders than who they order from.
For Takealot sellers, selling on Amazon will entail the same challenges and a few new ones. While Amazon Marketplace may have more efficient systems, you’ll still be required to meet the same strict SLAs and deal with returns, competition and price wars.
Be prepared for increased competition.
Takealot has never enabled international sellers to sell products on its platform. International sellers are a crucial feature of Amazon’s global marketplaces. These sellers help Amazon provide a near-infinite range of products to its customers. Many of these sellers have built strong private-label brands and are experienced at selling products on marketplaces.
Yet having studied the requirements of being an international seller on multiple Amazon marketplaces, there are several hoops that international sellers have to overcome before they can start selling.
For instance, on the Amazon Australia Marketplace, international sellers are required to register a business, pay GST (VAT), and obtain import licenses before they can start selling. You can be confident that the same rules apply to international sellers who want to sell their products on the Amazon South Africa Marketplace.
International sellers will weigh up the size of the e-commerce opportunity and the administrative burden required to sell in South Africa. There are 2 million active sellers on the Amazon Marketplace, for the vast majority of these sellers selling in South Africa will not make sense they’ll focus their efforts on much larger markets. But, there will be a few who will believe that selling in South Africa is a good opportunity.
Competition from international sellers on Amazon may seem intimidating. However, you need to remember that as a marketplace seller in South Africa, you understand what customers in South Africa want more than anyone else.
Additionally, international sellers won’t be able to sell their products on any other marketplace platform. Takealot will not face Amazon lying down, and there is no guarantee that Amazon will take significant market share from Takealot. Use this to your advantage and ensure you’re listed on all of the e-commerce marketplaces in South Africa.
How can sellers prepare for the launch of Amazon South Africa?
Building a successful business on Amazon is no different from selling on any other marketplace in South Africa.
Be listed on all marketplaces.
In the short term, you want to be listed on all marketplaces. You can get this started today both Bobshop (formerly BidorBuy) and Makro are determined to grow sizeable marketplace businesses and are open for registration. While these channels may not generate the same sales as Takealot Marketplace, I always recommend to sellers that they list on multiple sales channels.
Build a brand and focus on private-label products.
Sellers should focus on building out a range of private-label products and become the go-to brand in their given niche. The days of buying a bulk assortment of goods from Aliexpress are over.
Building a successful brand involves listening to customers and understanding their needs. Reading reviews of your products, and your competitors, is a great way to gain insights into what customers are looking for.
Since a customer can’t touch and feel your product, build product pages with high-quality images and detailed descriptions. These product images and descriptions should be accurate and comprehensive the more information a customer has about your product, the more likely they are to make a purchase and the less likely they are to return it.
Ensure you’re always in stock and equipped to sell your products across multiple channels. Not managing stock correctly is detrimental to your business. Build processes to ensure that you’re ordering stock at the right time and in the right quantities and ensure it’s listed on all the marketplaces in South Africa.
Amazon launching their marketplace in South Africa will help grow the entire South African e-commerce industry. Sellers must take advantage of this opportunity by being listed on all of these channels and focus on building out a range of private-label goods tailored to a South African market. Doing so will future-proof a seller and position them for success.