Amazon is recruiting 3,000 additional roles in its customer service teams in Johannesburg and Cape Town, bringing its total permanent workforce in South Africa to 7,000 employees. The new roles will provide round-the-clock support for Amazon customers in North America and Europe.
Amazon, which has had a presence in Africa for 15 years, does not yet have retail operations in South Africa. In April 2020, Amazon Web Service (AWS) launched its first Africa data center, in Cape Town. Amazon opened its first AWS office in Johannesburg in 2015, although it set up a Development Center in Cape Town in 2004 to work the Elastic Compute Cloud (EC2) services that form the basis of AWS.
Amazon’s only retail operations in Africa are via Souq.com, an English-Arabic language e-commerce platform that Amazon acquired for $580m. Souq is a classifieds platform enabling consumers and small businesses to sell goods online.
There is little indication that Amazon has an interest in retailing in Africa yet, and some market watchers have pointed to the cash burn and operational challenges experienced by Jumia as a sign that the market isn’t ready for Amazon. This may be true, but the dynamics in South Africa, where modern trade penetration is high and ecommerce growth far outpaces bricks and mortar, are not the same as elsewhere in South Africa.
Prior to the pandemic, leading supermarket chains Pick n Pay and Shoprite-Checkers were starting to innovate more in online – moves that paid off during lockdown as ecommerce sales shot up. Trendtype believes that much of the gains made during lockdown, when large numbers of customers who had never/rarely bought online started using online retail platforms, are here to stay. In effect, the supermarket chains could pave the way for a general merchandise retailer like Amazon to open up.