A month after launch, the e-commerce giant appears to be struggling to make significant inroads into the local market.
According to a retail industry analyst, there are several factors that might be contributing to Amazon ’s lacklustre launch, with the“They are up against a seasoned competitor , which has strong financial backing,” said Chris Gilmour, investment analyst at Gilmour Research. “There are also other competitors, but none as good as Takealot. Secondly, logistics . South Africa is a big country with poor logistical services for the end consumer.
“Buying online in South Africa is still in its infancy. It’s growing rapidly but still very small compared with physical shopping. Thus, it will take time, regardless, to assure aspiring new customers that they have a viable proposition,” said Gilmour.When Amazon launched in May, much of its product offering was flagged as either having limited stock or not being in stock at all. Not all the promised product categories were available on the website either.
“Prime guarantees free fast delivery for a modest monthly fee. South Africa is a big country with relatively poor consumer logistics capability and therefore fulfilment costs for Prime are going to be high. It follows, therefore, that the monthly Prime subscription will also have to be high.”
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