Naspers Bolsters Investment in South African Online Retail to Counter Amazon’s Arrival

As anticipation builds around Amazon’s imminent entry into South Africa’s burgeoning e-commerce sector, Naspers Ltd., the continent’s largest company by market value, is doubling down on its investment in the South African online retail landscape. The move is strategically aimed at fortifying its position against the global e-commerce giant’s foray into the country’s rapidly growing digital market.

Phuthi Mahanyele-Dabengwa, CEO of Naspers’ South African unit, affirmed the company’s commitment to strengthening its businesses during an interview on Bloomberg TV. She expressed confidence in Naspers’ preparedness to navigate the challenges posed by Amazon’s entry, emphasizing the significant investments being made to ensure resilience in the face of intensified competition.

South Africa, boasting the most developed economy on the continent and a youthful population, has become an attractive market for major retail players. With one of the largest upper-middle-income markets in the region, the country is drawing increased attention from retail giants such as Walmart Inc. and Amazon. Amazon, in particular, is set to introduce online delivery services in South Africa later this year.

Naspers, already a key player in the South African online retail landscape, owns Takealot, the country’s leading online retailer. In preparation for Amazon’s arrival, the company has been strategically expanding its services. Notably, Takealot has introduced one-hour delivery services, catering to a range of products from phone chargers to toys.

While e-commerce currently constitutes only about 4% of South African retail, there is significant untapped potential for growth. Mamongae Mahlare, CEO of Takealot, stated last year that the market has the potential to expand three to five times faster than in comparable countries. This untapped potential has fueled increased competition among major players aiming to capture a larger share of the market.

According to a study by market research firm World Wide Worx, online retail sales in South Africa witnessed a robust 30% growth, reaching 55 billion rand ($3 billion) in 2022. This growth trajectory underscores the increasing consumer shift toward online shopping, presenting both opportunities and challenges for established and incoming players.

Phuthi Mahanyele-Dabengwa expressed optimism about Amazon’s entry, noting that it is ultimately beneficial for South Africa. She highlighted Takealot’s deep understanding of the local market and its proactive approach to staying well-positioned amid the evolving landscape. As the competition intensifies, the e-commerce sector in South Africa is set to witness transformative changes, with consumers likely to benefit from a wider range of options and enhanced services.