Wednesday, June 7, 2023 | Amazon may be gearing up for its launch in SA | Amazon may be gearing up for its launch in SA




Photo by Jaap Arriens/NurPhoto via Getty Images

  • Amazon is reportedly securing two fulfillment centres in South Africa ahead of the expected launch of a retail platform. 
  • The company has been recruiting managers for Amazon’s marketplace in recent months.
  • Amazon has had operations in South Africa for many years, but has not confirmed retail plans.
  • For more financial news, go to the News24 Business front page

The South African launch of the online retailer Amazon may be getting closer, as details of two of its potential distributions sites appear to have been leaked online.

This followed another leak, exposed by Business Insider last year, of a plan to launch its online marketplace and other services in South Africa in 2023. Amazon has not confirmed the plan.

The company started advertising key positions last year. Local managers were sought to  “recruit and launch online sellers on Amazon’s Marketplace”.

Online news site reported on Friday that a user of the social network Reddit inadvertently came across a document published on Amazon’s Carrier Central web portal, which appears to show that the group intended to have “at least one fulfilment centre in Johannesburg and another in Cape Town.

Two addresses are mentioned: one in the Eastport Logistics Park near Kempton Park, Johannesburg and the other in Montague Garden City, Cape Town.

Amazon declined to comment about the properties, staff appointments and the extent of its plans for South Africa.

Steve Brown, CEO of real estate investment trust Fortress, confirmed that the JSE-listed group owned most of properties in the Eastport Logistics Park, but also declined to comment.

Anvil Property Smith, the rental agency which let the Montague Gardens property, told News24 that it is required to “act in strict confidence in relation to who we represent and the nature of the transactions we facilitate”.

The Montague Garden City property was visible on the group’s website on Friday but had been removed by Saturday. 

READ | Amazon’s SA plans show market’s potential, says rival Takealot

According to Amazon’s so-called Project Fela plan for South Africa, leaked to Business Insider, it reportedly wants to launch its full Prime service later in 2023. The Prime service involves paying a monthly fee to get all your Amazon online shopping delivered for free. In addition, Prime members also get free access to thousands of movies and TV shows through Prime Video, as well as the Kindle book library, games and music.

It also has tremendous expertise in delivery – with more than 400 warehouses across the world, 60 000 trucks, and 110 planes to get its goods to customers. 

How it will get products to South African clients has not yet been confirmed, but it is also expected to sell products on behalf of third parties on its local platform.

While this will be Amazon’s first entry into South Africa retail, it has been operating in the country for many years, and has access to a lot of data via its current South African customers, says founder and director of investment website, Simon Brown previously told News24.

Its massive Amazon Web Services cloud computing business has strong South African roots. 

South African and former Amazon vice president Chris Pinkham first pitched the idea of a cloud computing business to his boss Jeff Bezos in 2003. This gave birth to AWS, which remains the most profitable unit in Amazon.

Pinkham moved back to Cape Town from the US in the early 2000s and started building key products for AWS, alongside a team in Cape Town which included Willem van Biljon, who later became Takealot’s CEO.

A local AWS business was launched, and some of South Africa’s largest companies – including Absa, Investec, Standard Bank, Old Mutual and Pick n Pay – are clients.

More than a decade ago, Amazon also opened a call centre in Cape Town, which is serving its shoppers across the world.  This means that Amazon already has some infrastructure in place for its retail venture.

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