Amazon is expanding its focus on South African small and medium-sized enterprises, aiming to increase its share of the country's e-commerce sector by integrating local sellers into its global marketplace and logistics systems. According to TechCabal, the company commissioned World Wide Worx, an independent technology research firm, to conduct a study of 1,400 local businesses to understand their digital adoption challenges and growth barriers.
The resulting Small Business Digital Adoption Report, released on Tuesday, revealed that 86% of the surveyed businesses generate sales through online channels. However, only 32% of these online sellers currently utilise major marketplaces. Arthur Goldstuck, the chief executive of World Wide Worx, noted that the market has moved beyond basic digital setup and is now grappling with the complexities of scaling operations, including delivery costs and customer expectations.
TechCabal reported that logistics and delivery were identified as major challenges by 62% of active online sellers, while 46% struggled with managing returns. In contrast, fewer businesses cited connectivity or payment systems as primary obstacles. To address these issues, Amazon is promoting its Fulfilment by Amazon service, which allows sellers to store inventory in Amazon’s network, where the company handles storage, packing, shipping, and customer service. This model is intended to reduce the operational burden on small business owners.
Robert Koen, Amazon’s managing director for sub-Saharan Africa, explained that while marketplace fees are a consideration, they should be compared against the total cost of maintaining independent e-commerce infrastructure. Koen stated that Amazon currently offers referral fees of around 5% and fulfilment promotions to encourage adoption. He added that the platform serves as a gateway for international expansion, allowing South African sellers to list products in markets such as the United States, United Kingdom, and Brazil with minimal additional complexity.
The company aims to leverage its existing investments in South Africa, which exceed $2.5 billion over the past decade, to support this growth. TechCabal noted that Amazon’s network includes nearly 5,000 pickup points and artificial intelligence-powered tools designed to help businesses manage the regulatory and logistical demands of cross-border trade. The strategy positions Amazon as a partner in consolidating online operations for local firms seeking to reach broader customer bases.