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Amazon taps new markets for growth

Amazon taps new markets for growth
Amazon taps new markets for growth

Amazon’s track record of super fast deliveries at record time will be tested in South Africa with its newly opened marketplace, given several challenges beyond its control. 

The African country has been grappling with load shedding (extended power cuts) on and off for 17 years, forcing many companies out of business or slowing down operations. But make no mistake, Amazon is already finding ways around the problem.

The international retailer has told Locate2u: “With online retail accounting for only 4% of total sales in South Africa, compared to higher figures in other countries, there’s significant room for growth.”

Amazon’s growth journey in the US

Amazon’s expansion into new markets, such as South Africa, comes at a time of significant growth for the tech giant. In the first quarter of 2024, Amazon reported a 13% increase in net sales compared to the previous year. The North American segment saw a 12% jump to $86 billion.

One of Amazon’s key strengths lies in its ability to deliver fast and efficiently. In the US, Amazon Prime achieved record speed delivery times, with nearly 60% of Prime members’ orders arriving the same or the next day across its 60 largest metros. This success underscores Amazon’s commitment to providing a seamless shopping experience for its customers.

The retailer’s focus on its fulfillment network is also crucial to its growth strategy. The company continuously seeks opportunities to optimize its network to lower costs while improving the overall customer experience. By leveraging its fulfillment capabilities, Amazon aims to sustain its growth momentum and strengthen its position as a global leader in e-commerce.

Amazon on sustainability mission

In the next six years, Amazon hopes to have 100,000 electric delivery vehicles on the road globally. Decarbonizing transportation across its fleet in all countries is one of its top priorities. 

How will they do this?

  • Increasing fleet efficiency.

  • Expanding the use of low-carbon fuels.

  • Scaling electric and alternative-fuel vehicles. 

Amazon has pledged to achieve net-zero carbon emissions across its operations by 2040. This is a decade earlier than the Paris Agreement target, through its commitment to The Climate Pledge.

One of its shorter-term goals is to “match all of our global electricity with 100% renewable energy by 2025.” As one of the world’s “largest corporate purchasers of renewable energy,” Amazon believes it is on track to achieving this goal on time, five years ahead of the original target.  

Amazon electricity solution 

Amazon Web Services (AWS) has been running a solar power plant project in the Northern Cape for the last three years. The retailer says the project is expected to generate up to 28,000 megawatt-hours (MWh) of renewable energy per year. This is equivalent to the annual electricity consumption of more than 8,000 homes in this country. 

“It will avoid producing an estimated 25,000 tons of carbon emissions annually—equivalent to removing 5,400 cars from South Africa’s roads,” says Amazon.

‘Significant room for growth’

Amazon wants to make “customers’ lives better and easier every day” and says it is not focused on its competitors. Acknowledging the enormous potential to explore the untapped online retail sales market, Amazon is “enthusiastic” about collaborating with retailers, independent sellers, and brand owners in this region. 

It promises to give customers a “great shopping experience, competitive pricing,” and a variety of products that include international choices. 

The retailer vows to provide “support” to independent sellers. “With our Fulfillment by Amazon service, independent sellers have access to the same world-class logistical and customer service expertise as our retail business.”

NOW READ: Amazon opens doors in South Africa; entrepreneurs scramble

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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