The biggest disruptive news of the year has to be the launch of Amazon on African soil and choosing Capetown as a home for its headquarters! Of course there are fights by the indigenous Khoisan group over the historical land taken but this will be sorted in the nearby future.
Fact is Amazon is now next door and the E-commerce giant means business. They are not the only one with Twitter, Facebook and Google already on the continent with preferred regions being West Africa and South Africa.
What are the implications of Amazon setting up next door?
Sophisticated Logistics: Amazon has well established logistical systems for shipment and transportation of goods. This may mean products ordered today on Amazon may reach a Zimbabwean customer in 2-3 days! They are likely to set up warehouses and advanced value chains in several regions across the continent with South Africa having the lion’s share. Presence on the continent likely to boost confidence in the world’s largest online shop. With Africa having the largest youth population on earth of +600m with most of them having access to smart phones—It all looks bright for Amazon on the continent.
Opportunities for the region: To those who strategically position themselves, good times beckons for listing of various products and services. The logistical value chains will also create plenty of opportunities for warehouses, cargo and also jobs.
Trouble for local E-commerce sites: Unfortunately Africa prefers foreign products—quite regrettable as the continent will continue to be a consumer of foreign products. All local e-commerce sites likely to fold as most Africans will rush for the world giant.
Global outreach of African products: Another big plus for the continent is that Amazon has a world reach and this means stone sculptors in Guruve will list and showcase their products, arts and crafts from Zomba in Malawi will also have a fair chance of market access.
Trouble for local industries: When our forum toured Malawi, we found out the craze on importing from China with some entrepreneurs even ordering wedding gowns, shoes and hats. This of course coming at the expense of local industry capacitation. Amazon likely to push more South African products than other nations and this is where Zimbabweans need to strategically place themselves to push own products.
Goodbye to profiteering: With Amazon right next door and able to efficiently deliver products in a matter of days—its going to be a tough battle for businesses used to extortionist pricing. Consumers will be able to compare prices of goods available locally against those on foreign soil. Profits margins of 300% are likely to be whittled away.
Of course Amazon just acquired a piece of land and are likely to take 2-5 years before commencing full operations but their presence signifies serious intentions on the continent. The future of retail business on the continent therefore headed for interesting times. Its inevitable there will be losers and gainers from their presence.
We also expect Alibaba to follow suit in the coming years as the fight for Africa’s E-commerce opportunities intensify. So study more on the rise of E-commerce in the developed world, impact on small businesses and related opportunities and risks.
Best news ever. We are tirwd of the ridiculous mark ups and charges that the horribke companies and individuals have been leving on us. It will be good riddence of bad rubbish!