DStv’s big Amazon threat in South Africa

Amazon is expected to launch its marketplace in South Africa in February 2023, with Amazon’s Prime membership program becoming available shortly afterwards.

Amazon has been in discussions with warehouse providers, couriers, and fast-moving consumer goods providers as part of its South African expansion plans.

It has also started recruiting staff for its “ZA marketplace”, and a reference to Amazon’s South African marketplace showed up on the Amazon support drop-down menu.

Many stakeholders are discussing the impact of Amazon’s marketplace on South Africa’s ecommerce market and what effect it will have on Takealot.

Amazon will undoubtedly shake up South Africa’s online shopping space, but its launch in South Africa will impact more companies than Takealot and Makro.

Amazon Prime gives subscribers a myriad of shipping, shopping, streaming, reading, and other benefits.

Prime members enjoy same-day, one-day, and two-day delivery on numerous items, get exclusive product deals and qualify for rewards and cash-back on purchases.

It also allows subscribers to borrow books and magazines from the Prime Reading catalogue.

Free games, exclusive in-game content, and a free Twitch channel subscription are also part of the subscription.

The biggest benefit of Amazon Prime, outside of expedited shipping, is the Amazon Prime Video streaming service.

Like Netflix, Disney+, and Showmax, Prime Video offers unlimited streaming of movies and TV episodes.

Although Prime Video is already available in South Africathe tremendous benefits of Amazon Prime will encourage many South Africans to sign up for the service.

When they get access to Prime Video as part of their subscription, they may reconsider paying hundreds of rands for DStv.

To put it in perspective, South Africans will be able to subscribe to Amazon Prime for significantly less than a low-end DStv package.

The benefits of fast shipping, music, gaming, books, magazines, photo storage, and video streaming make it a tough value proposition to beat.

MultiChoice has previously said streaming services, like Netflix and Amazon Prime, pose “an existential competitive threat” to its DStv business.

The broadcaster has most likely overstated the competitive threat from streaming services — it was part of a competition hearing, after all — but Amazon Prime must be of concern to the company.

The bundled offering from Amazon is unlike anything South Africans have experienced before.

South African families are under pressure to cut costs, and an Amazon Prime subscription’s online shopping and entertainment value is unmatched.

For Prime subscribers, it will be easy to cut DStv and not lose much in terms of entertainment.

Amazon’s imminent launch in South Africa should, therefore, cause sleepless nights for more players than merely Takealot other Massmart.

This article was first published on Daily Investor and is republished with permission.

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