Amazon announced yesterday that it will be expanding its operations into South Africa.
Bezos’s company already had a presence in 58 other countries…
While South Africa is certainly a notable market size with a population of over 59 million, it will ultimately be a drop in the buck for a company like Amazon…
The real value isn’t so much in one single company, but rather in the long-term prospect of the Continent!
While Amazon is the clear leader in North America and Europe, its presence elsewhere is much smaller.
Sure, Asia is a vast market but there’s a problem…
The continent already has steep competition, making it much more difficult for Amazon to dominate it as it has with other regions.
This leads us to Africa…
It’s still a relatively small market despite the population, but it is expected to expand rapidly in the coming years!
By 2025, half a billion people will be e-commerce users according to the International Trade Administration.
Not to mention that Africa is the fastest-growing continent by a long shot…
The United Nations projects that Africa’s population will reach close to 2.5 billion by 2050.
All of this is to say that Amazon is likely strategically positioning itself to be the dominant player in this market down the road.
With that said it will be no walk in the park!
Even South Africa, which is currently one of the most developed countries on the continent, poses a number of challenges for the company.
They suffer from burdensome local regulations as well as major transportation issues just to name a few…
With that said, I expect that Amazon will be able to get a stranglehold of the market with the amount of resources they have at their disposal.
That’s all for today!
Until Next Time,