Africa’s eCommerce Wars: Amazon, Wish Land in South Africa

What should we make of global players' recent investments in African eCommerce --Amazon plans a fancy Cape Town hub while Wish partners with Post Office SA to sharpen last-mile logistics

Two significant stories landed in the past week involving global eCommerce players making significant moves into South Africa.

The big news is Amazon’s plans for a new Cape Town campus to serve as the hub of its Africa operations. The facility will be built in Cape Town’s Southern Suburbs.

The City of Cape Town has approved the project. Amazon will reportedly employ up to 3,000 people at the location. Amazon will be the key tenant of a 150,000-square meter mixed-use development on 15 hectares, according to local news reports.

This is a significant signal that Amazon has no plans to concede eCommerce on the continent to regional players like Jumia.

Also significant, the U.S. eCommerce platform Wish has forged a strategic partnership with the South African Post Office (SAPO) to improve the last-mile experience for its ZA eCommerce consumers.

The partnership is all about getting packages delivered safely and quickly to Wish’s customers in the region.

“Our mission at Wish is to democratize eCommerce and make it affordable, accessible, and open to all by constantly improving product, process, and technology,” said Thomas Chuang, Wish’s VP of Operations, echoing language from Wish’s website.

“The South African market is an important one for the business and our partnership with SAPO will help us to provide faster time to door by 50% or more. This is critical to ensuring a positive customer experience and satisfaction and will enable us to better serve our customers in this market.”

Some highlights of the partnership include a text message application that informs customers that their parcel is ready for collection. The deal also brings end-to-end tracking visibility and delivery confirmation. And customers will receive bundled shipments for multiple items.

SAPO brings to the partnership, among other things, a fleet of roughly 1,000 vehicles and outlets across South Africa for delivering Wish parcels to their destination.

“The South African Post Office is staying relevant to the latest e-commerce trends and has improved its tracking system with the implementation of the capability to track international parcels,” said Sekano Kgalanyane, SAPO’s Head of Logistics. “This empowers customers to track items from dispatch to delivery.”

Wish is a mobile-first online shopping platform based in San Francisco. It was founded in 2010 by Peter Szulczewski. The company went public in December 2020. So far Wish has operations in three African nations, Morocco, Nigeria, and South Africa. It also has operations in Saudi.

Wish’s website shares some stats that give a sense of the company’s scale.

These two announcements signal that interest in Africa’s promising eCommerce market is growing. And international players appear poised to invest in the facilities, partnership, and technology necessary to add value and compete on the continent, which has an estimated 280 million online shoppers today, according to Statista.

As it has everywhere in the world, the COVID-19 pandemic has massively accelerated eCommerce adoption in Africa. In South Africa, for example, online retail grew by 40% in South Africa during lockdown, according to Research & Markets.

BigFive Digital will soon announce details of an Africa SMME eCommerce Summit. Stay tuned for details. ern