Amazon (NASDAQ:AMZN) is set to extend its global e-commerce presence into South Africa by launching a dedicated local website in the country next year. This move is in response to the growing trend of online shopping in South Africa, which has seen a surge post-pandemic.
With the planned launch of a South African website, Amazon is expected to capture a significant share of the country’s online retail market, both among retailers and customers. This expansion into South Africa is part of Amazon’s broader strategy to enter the African market, following its earlier move into Egypt.
Competition in South Africa’s online retail market is intensifying, as Amazon will compete with local players like Takealot.com, which is actively working to strengthen its position in the South African e-commerce space. Takealot.com recently partnered with Mastercard to offer discounts to select cardholders, enhancing its value proposition and customer reach.
The South African e-commerce market holds significant growth potential. According to reports, the market is projected to reach around $6.32 billion in 2023 and is expected to expand to approximately $9.91 billion by 2027, with a compound annual growth rate (CAGR) of 11.9% during this period. User penetration in the South African e-commerce market is also expected to increase, reaching nearly 60% by 2027.
This move aligns with Amazon’s global expansion strategy and positions the company to tap into the South African market’s growth potential. The global e-commerce market is projected to reach $21.27 trillion by 2028, with an estimated CAGR of 14.5% between 2022 and 2028. Amazon’s stock has already shown strong performance, with a year-to-date gain of 54%, outperforming the industry’s growth of 33.2%.
Expanding its e-commerce footprint in South Africa is expected to boost Amazon’s online store sales, which were $52.9 billion, up 4% year-over-year in the second quarter of 2023. The company’s online store sales are projected to reach $228.48 billion in 2023, indicating year-over-year growth of 3.9%.
Amazon’s foray into the South African market reflects its ongoing efforts to extend its global reach and capitalize on the growing e-commerce trends in different regions.
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