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Small businesses to bear brunt of e-commerce war

FILE - US online retailer Amazon looks set to open its doors to South Africa within the next year, adding to small business e-commerce woes amid an already competitive market.

FILE - US online retailer Amazon looks set to open its doors to South Africa within the next year, adding to small business e-commerce woes amid an already competitive market.

Published Jul 6, 2022

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Johannesburg - US online retailer Amazon look set to open its doors to South Africa within the next year, adding to small business e-commerce woes amid an already competitive market.

With the likes of local e-commerce giant Takealot, other large platforms like Loot and Everyshop, scores of other large chain digital platforms and niche online stores - small businesses already face stiff competition.

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However, experts believe their growth lies in differentiation, personalisation and understanding of their consumers.

Internet entrepreneur and head of local web hosting company 1-grid.com, Thomas Vollrath, said that SMEs could differentiate themselves and continue to profit by focusing on home-grown products and unique stories.

“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,” Vollrath said.

Recently leaked documents reported by several local media houses pointed to Amazon.com launching in South Africa in 2023, threatening even the country’s biggest online stores, especially smaller businesses trying to break the market.

Like Takealot, with millions of products globally listed across categories, Amazon may also open doors to other product purchases from other markets, given its international listing.

On the positive side, South Africans will generally have low prices and massive discounts, made possible by the sheer size of the company and its inventory.

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To counter this, Vollrath said local entrepreneurs need to focus on leveraging the country’s strong preference for home-grown products that are proudly South African.

“This strategy should extend to all your choices – from the payment platform you use for checkouts to the domain extension on your website. 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 on your brand story,” said Vollrath.

In addition, local sellers can also implement the ‘if you can’t beat them, join them’ strategy by integrating Amazon into their e-commerce strategy.

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When it launches locally, Amazon will be rolling out its sellers’ marketplace, allowing South African businesses to get their products onto the biggest sales search engine in the world.

“Depending on fees and registration processes, this might be a good approach for certain businesses. 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 potential customers can learn more about your product, read up on FAQs, and even contact you directly,” said Vollrath.

While exact details around Amazon’s local launch remain vague, small business owners are encouraged to start planning strategies around the impact of the launch of large online retailers to ensure they succeed.

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