Amazon is coming to Nigeria

Amazon, the world's largest e-commerce company, will most likely disrupt the Nigerian e-commerce sector when it launches in the country in April 2023. Amazon will compete against the two leading competitors in the Nigerian e-commerce industry, Jumia and Konga.

Amazon, which presently operates in 20 countries, is focusing on long-term development as it expands its US-based operation.

According to a Business Insider source, the company will expand to Africa, Europe, and South America while having its headquarters in the United States. Belgium, Chile, Colombia, Nigeria, and South Africa are the countries on Amazon's expansion list.

Amazon has been reportedly hiring salesmen and engineers in Lagos, implying a growth of its operations in Africa's largest economy. In addition, the business has recruited a big advertising firm, Insight Publicis to focus on its initial push for Prime Video subscribers in Nigeria, as well as funding local film and television studio development such as Anthill Studios and Inkblot Productions, the producers of the box office blockbuster The Wedding Party, and licensing arrangements.

“We are investing in the region [and] this is what the advertising campaigns represent,” Amazon said in a statement.

The e-commerce and cloud computing giant is also considering expanding its AWS cloud services in Nigeria. AWS is the world's biggest cloud computing service, with roots in South Africa dating back to circa 2004. AWS services are already being utilized by businesses across Africa. Despite the lack of a data center or office, AWS has become a popular service for many startups and major businesses in Nigeria.

Nigeria has seen a frenzy of data center investments due to evolving data protection legislation and increased demand for cloud computing among businesses. Actis, a private equity firm based in the United Kingdom, invested $250 million in RackCentre, a Nigerian data center focused on West Africa, in March 2020, and Equinix acquired MainOne, a cloud computing company and operator of West Africa's first privately operated undersea fiber cable, in December 2021. Large underwater cable initiatives to improve internet access in Africa have been backed by big tech firms like Meta and Google.

In 2016, as part of a global rollout, Amazon launched its Prime Video streaming service to Nigeria, and its Amazon Web Services (AWS) service has been utilized by numerous domestic enterprises for several years. However, outside of South Africa, the corporation has no actual presence in the continent or in most of Sub-Saharan Africa.

“As more Africans get on the internet and organizations continue to improve digitization efforts, the demand for digital services and infrastructure increases,” said Ayobami Omole, an analyst at Tellimer Research.

Local businesses, however, continue to face payment challenges because AWS prices are levied in dollars instead of naira, which is challenging due to the Central Bank of Nigeria's policy banning dollar transactions in order to support the naira. A local AWS office might be able to assist you get over that hump.

Africa has emerged as a key growing market for streaming services, with Disney+, Netflix, Amazon, Canal+ in France, and Showmax in South Africa all battling for users. Although Amazon has not revealed data for Prime Video viewing in Africa, Digital TV Research, an analytics firm, believes that the service has 600,000 members in the continent. By 2027, Amazon Prime Video is expected to attract 1.5 million new customers.

If Amazon starts a branch in Nigeria, this will mean that they will create a lot of jobs in Lagos, Jobs in Abuja, and most likely bring thousands of jobs to Nigeria.  Sadly, this will also bring an increase in the cost of living in any area where Amazon decides to house its warehouse in Nigeria.

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