Johannesburg – Online retail behemoth Amazon.com’s foray into the South African online retail space has long been touted and will in all likelihood take place sometime in 2023.
According to the US publication Business Insider, Amazon’s entry will undoubtedly impact the margins of local small businesses and take a large chunk of the market share when it comes to online sales.
Thomas Vollrath, head of local web hosting company 1-grid.com believes the only way to compete with Amazon is for entrepreneurs to focus on what they can offer that global companies can’t.
He says that by focusing on what makes them different from Amazon – personalised service, the supply of home-grown products, telling unique stories, and using their in-depth understanding of South African consumers, local SMEs can stand out and continue to thrive.
“The best way for small businesses to differentiate themselves from the convenient-but-impersonal experience of Amazon is to offer personalised service – and build personal connections, Vollrath said.
“Use your website, social media, and delivery notes to tell the story of your business. This is the best way to really connect with consumers and make them feel good about buying from you.”
The biggest advantage large entities like Amazon hold is their ability to offer consumers massive discounts and lower prices made possible by the large size of their inventory.
South African companies may not be able to compete with Amazon’s pricing but they can look to leverage the South African consumers’ preference for locally manufactured goods.
“This strategy should extend to all of your choices – from the payment platform you use for checkouts, to the domain extension on your website,” Vollrath said.
“A .co.za domain, for example, tells customers that you are based in South Africa and that you in turn support local yourself. While these may seem like small elements, they have a cumulative effect when it comes to your brand story.”
South African entrepreneurs should not only see Amazon as competition but also look into getting their products onto the Sellers Marketplace which will be part of Amazon’s rollout in South Africa. This will allow South African businesses to have their products uploaded onto one of the biggest global marketplaces.
“The saying goes that if you can’t beat them, join them. Depending on fees and registration processes, this might be a good approach for certain businesses,” he said.
“The key to success here is to highlight the quality and unique nature of your product, compared to others on the Amazon platform. It’s also important to maintain a web presence so that potential customers can learn more about your product, read up on FAQs, and even contact you directly.”
One thing is for sure, Amazon is coming and entrepreneurs and their businesses can thrive provided they are prepared and creative in finding ways to leverage what makes them proudly South African.
IOL Business