Artificial IntelligenceEtana Energy signs a R1.8 billion deal with GuarantCo and British International Investment to boost renewable energy in South AfricaSouth Africa’s retail sector has been grappling with weak economic conditions, characterised by stagnant inflation-adjusted GDP over the past five years, persistently high unemployment, and elevated inflation.
“Although some larger South African firms like Takealot and Checkers have a head-start, the market has yet to coalesce around dominant digital frontrunners,” said Thomas Kingombe Kock, Managing Director and Partner at BCG, adding that the entry of foreign marketplaces—Shein, Temu, and Amazon—marks a new phase of digital competition locally and potentially across sub-Saharan Africa.
One area where Amazon could disrupt the market is by leveraging its sophisticated pricing analytics, enabling it to change prices every 90 seconds to match competitors on key products. This dynamic pricing approach is particularly relevant in South Africa, a highly price-sensitive market where 27% of respondents surveyed confirmed they compare prices across sites and are willing to wait longer for lower prices, as seen with Shein and Temu.
It is in these fulfilment capabilities that Amazon is looking to gain traction. When 75% of consumers live outside the formal address system, last-mile fulfilment is critical in South Africa.
From a challenge perspective, these international players bring with them sophisticated pricing strategies, vast product selections, and a willingness to invest heavily to gain market share.