The imminent entry of Amazon.com Inc. into South Africa next year is expected to fuel a surge in online sales, as projected by The Foschini Group Ltd. (TFG).
In a recent interview following the release of first-half earnings, TFG’s Chief Executive Officer, Anthony Thunström, expressed confidence that e-commerce revenue is set to double, constituting 10% of TFG’s total South African sales within the next two years, with the potential to rise to 15% shortly thereafter.
“Amazon’s arrival next year is going to expedite online sales more than most people have anticipated,” he remarked. “The more people engage in online shopping, the more comfortable they become with that channel.”
Despite nearly three-quarters of the country having internet access, e-commerce currently represents about 5% of retail sales in South Africa. Amazon, a longstanding provider of web services in the country of approximately 60 million people since 2004, recently disclosed plans to initiate its online delivery business in the coming months.
The news translated into a significant surge in TFG’s shares, rallying up to 7.5% by 2:25 p.m. in Johannesburg, positioning it as the third-best performing share on the FTSE/JSE Retailers Index this year.