GLOBAL STRATEGY

Why marketers should consider a global Amazon marketplace strategy

By our News Team | 2022

Amazon’s e-commerce footprint in Africa is still sadly lacking. But for local marketers looking offshore, Amazon offers many potential benefits.

Amazon raked in a substantial US$31-billion in ad revenue last year and, while this may account for a relatively small portion of the tech giant’s overall earnings, its ad business is one of its fastest-growing divisions. 

For local CMOs looking to take their products global, Amazon must be an essential part of their digital strategy. Even for those focussed only on tapping into domestic markets, there are opportunities.

“Most people were already dabbling with online shopping, but Covid put that growth trajectory in a pressure cooker, with Amazon accounting for the largest growth. In just 18 months, Amazon has become the number one global sales channel for one of our enterprise clients,” explains Tim van der Bilt, founder and CEO of Incubeta Maze-One, a full-service marketplace management specialist.

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Image by Mary 1826 from Pixabay

“It’s become clear for many brands that this is the platform where their customers are shopping and it makes sense for them to invest in the platform.”

Most of Amazon’s ad revenue comes from the same PPC model as Google Search. The company also has a DSP (demand-side platform) model which allows advertisers to programmatically buy display, video and audio ads.

Amazon fuels its DSP ads with its platform data to help advertisers reach new and existing audiences both on and off the platform. The data from across all Amazon’s products – including its retail website, Twitch, IMDb and Amazon Prime. These all form part of the data sets that advertisers can tap into.

Dealing with the third-party cookie dilemma

“Amazon is well positioned for the death of the third-party cookie, as every customer has a single account across all their products. They know who you are, where you live, what you buy, what you watch and what you are interested in; and it’s all first-party data. They own the entire ecosystem,” says Van der Bilt.

“It’s similar to the Google model. But, with Google, a consumer would click out to another website, while Amazon keeps you in their own vast e-commerce world.” 

The multinational set up its Amazon Web Services (AWS) offices in Cape Town back in 2004, but has yet to act on expanding its African e-commerce footprint.

“Internationally, many consumers have an Amazon Prime account which bundles all the platform services, giving them free same-day delivery on anything bought on the Amazon Marketplace. This makes it a no-brainer for consumers to choose this as their preferred e-commerce site. 

“However, in South Africa at the moment, only certain products are eligible for shipping to the country and last-mile fulfilment relies on the SA Post Office. This has had an unfortunate consequence of diminishing local consumer support for the company,” notes Roan Mackintosh, Incubeta Managing Director for Middle East and Africa.

While Amazon lags in its Africa-focused offering and the future of its Cape Town operations remain uncertain, Mackintosh says local companies should not dismiss the Amazon opportunity. For local businesses hoping to break into international markets, getting to grips with the Amazon marketplace becomes far more urgent.

“With one account and one backend integration, you can sell your products across the globe. [For] South African CMOs who have a global expansion mandate, properly understanding how the Amazon marketplace works and what the potential upside [is], could be is vital,” observes Van der Bilt.

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