Listen here.Amazon is turning up the heat in South Africa. Two years after launching its local marketplace, the e-commerce giant has officially rolled out Amazon Prime at a dramatically lower price, taking direct aim at Takealot. Global Prime chief Jamil Ghani explains why Amazon believes fast, free delivery, streaming, gaming and exclusive Prime Day deals can win over South African shoppers. He also reveals how Prime works, why it’s profitable, and what could be next for Amazon in the country..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Edited transcript of the interview.00:00:04:00 - 00:00:33:13Alec Hogg: Two years after Amazon launched Prime in South Africa, it’s now really launching Prime in this country at a huge discount. What a gauntlet being thrown down against Takealot. And we’ve got the big man himself, the head of Amazon Prime globally. Jamil Ghani is with us on BizNews TV today.00:00:33:15 - 00:00:55:09Alec Hogg: Jamil, on a day like this, you’ve really just got to start with the headlines. I pay I think it’s 99 rand a month for Amazon Prime at the moment. As of today, I’ll be able to buy it for R59 a month, or indeed, if I want to pay upfront for a year, R399, which comes out to around R33,25 a month. These are extraordinary price cuts compared to what some people are already paying. So presumably you’ve looked at the South African market in the last two years and said, we’re going to go for it.00:00:55:11 - 00:01:53:01Jamil Ghani: Yeah. Well, thank you very much for having me first of all. It’s a very, very important and celebratory day today to be launching Prime in South Africa, our 27th country. Like you said, members have been able to enjoy Prime Video for some time now at R79 . They now will be able to enjoy all of the Prime benefits, including free, unlimited shipping, which I’m sure you want to talk about, for R59 . And for those that are ready to commit to a year, it’s R399 , which, as you did the math, comes out to a screaming deal on a monthly equivalent basis.00:01:53:03 - 00:02:18:11Jamil Ghani: We’re incredibly excited. Prime everywhere is about three things. It’s about shipping and the convenience it brings, savings, which we’re going to talk about Prime Day, I’m sure, which I’m extremely excited about for our South African members, and then entertainment. And the Prime programme in South Africa was built for the country across those three key pillars.00:02:18:13 - 00:03:00:05Alec Hogg: You run this programme around the world, 200 million members. Have you got a target for how many you can add through the South African ecosystem?00:03:00:07 - 00:04:14:13Jamil Ghani: Well, we have big aspirations. We think the proposition will resonate strongly. That combination of fast, free, unlimited shipping, next day in all the major cities, same day in three of the biggest cities - Johannesburg, Cape Town and Durban - Prime Video, free downloadable games from Amazon Luna, that combination is a fantastic proposition. We don’t share our specific numbers. We have well north of 200 million in 27, now 27 countries as of this morning. I’m obsessed about every single customer experience. I want to make sure that customers can experience Prime. We offer a 30-day free trial, which also sets us apart from a lot of other subscriptions that have gone away from doing that.00:04:14:16 - 00:04:36:07Jamil Ghani: We want Prime members to experience the programme and to decide how it fits into their lifestyle. I think you will find, and they will find, that it just transforms the way you think about shopping - removing the complexity of shipping fees, broad selection, same on entertainment. So I think it’s day one, as we say, literally today, and I hope it will resonate with our customers in South Africa.00:04:36:07 - 00:05:53:00Alec Hogg: Jamil, I recall the privilege of being a Prime member in the UK, and my wife ordering a whiteboard marker that arrived the same day. It continued to baffle me for years. Now I’ve got you to explain to me how you can do this. What are the economics? And it’s even cheaper now. What are you offering to South Africans at 33 rand 25 a month? There’s no limit on the ticket price, and you will deliver in the major centres the next day. It sounds like the economics don’t add up, but clearly they do.00:05:53:01 - 00:07:16:00Jamil Ghani: Let me just state up front that we do not run Prime globally, in any of the 27 countries, as a loss leader. Prime is intended to be a profitable enterprise, and is a profitable enterprise globally, and in the vast majority of countries. Of course, when we’re getting started, as you know, commerce is a game of scale. We’ve had the store for two years. The reception has been humbling, but we’re just getting started. We’re still ramping selection, we’re ramping sellers, we’re growing our presence and our service to customers, and Prime is the next step in that journey. But very clearly, our aspirations are for every programme to be profitable.00:07:16:02 - 00:09:11:13Jamil Ghani: You go back to 2005, when we launched Prime in the United States, it was one million items - basically everything Amazon sold at the time. The bet was that, in the long run, removing the number one friction that customers around the world tell us prevents them from shopping online - which is fees and the imprecision of delivery - if you could remove that cognitive load, you would earn more and more business over time. Ultimately, those scale economies come into play, and you get to a place where every unit going out the door is contribution profit positive for the business. So your incentives and our incentives are aligned. We don’t run Prime as a breakage model. We want our members to use Prime as much as is relevant for them in their life, whether it’s that one dry-erase marker or the entire shop of everyday essentials, or back-to-school needs and everything in between. We invest for the long term in individual customers and countries. And ultimately, when you look at our programmes that have been established for a couple of years - or in the case of the United States, 21 years - those programmes run as profitable enterprises.00:09:11:13 - 00:09:33:03Alec Hogg: You mentioned food in South Africa. We have an unusual situation where supermarkets are very aggressive in the delivery of fresh food. And your competitor in South Africa, Takealot, has got a close relationship with Prosus, which is one of the global leaders in delivery of restaurant food. Those two areas would seem to be a blind spot for you, but how are you going to compete there?00:09:33:03 - 00:10:16:08Jamil Ghani: Perishables, groceries, food delivery are very important to households all around the world. And while I know that in South Africa there is really strong competition and really strong players in that space, the same is true in many countries. The thing I would say for us in South Africa is we’re just getting started. Prime is going to get better and better over time. You need only look at other countries around the world and you can see how we’re investing in faster and faster speeds, more and more selection, including perishables, and then have selectively partnered with folks in the food delivery space to also bring that as a Prime benefit as well.00:10:16:08 - 00:11:39:08Jamil Ghani: So I don’t have anything to share today. Today the message is really about next-day delivery, same-day delivery, entertainment benefits in Prime Video and gaming. And then very importantly, Prime Day, which is the single biggest celebratory moment for Prime members in any country globally. We have a really exciting Prime Day planned in just a couple of weeks, taking place from June 23rd to June 26th in South Africa. We’re very excited to launch the programme now so that our new Prime members in our latest country can also participate in this big global event.00:11:39:08 - 00:12:44:06Jamil Ghani: If you go back now 12 years to 2015, the team thought there’s really not much going on in the retail calendar during the summer months. That’s not a typical peak period. And so quite bluntly, they invented a retail holiday. At first we were misunderstood - what are they trying here, what are they doing? It has now become one of the biggest retail events globally. For us, it is the biggest Prime member-exclusive event all year. It complements Black Friday, but Black Friday tends to lean towards holiday shopping. Prime Day is different - it covers everyday essentials as well as bigger purchases, from cleaning supplies and household goods to electronics, apparel, home, beauty and décor.00:12:44:06 - 00:13:40:06Jamil Ghani: Prime in each country is curated locally, so it is a global event but also a local one. We want Prime to feel purpose-built for South Africa. We move as fast as possible, but as slow as necessary because the Prime experience is an elevated one. Prime is not a loyalty programme. It’s not about shop more and get rewards. It’s a different model. You pay a little more to elevate the experience - removing shipping thresholds and minimum order values, and ensuring fast delivery.00:13:40:06 - 00:14:01:19Jamil Ghani: In Kliptown, Johannesburg and Durban, you get same-day delivery. Large selection, competitive prices, plus entertainment and future benefits.00:14:01:19 - 00:15:07:20Alec Hogg: Well, Amazon is a member of many investors’ portfolios. We understand the motivation behind Prime - Amazon benefits because customers spend more. But in South Africa, I’d like to understand how you plan to break the dominance in e-commerce and streaming, particularly where rights are controlled locally.00:15:07:20 - 00:16:17:05Jamil Ghani: We focus on customer experience. We are inspired by competitors, but we don’t obsess over them. For South African streamers, we are bringing global originals like Reacher, Jack Ryan and Lord of the Rings, alongside local content like Rise: The Siya Kolisi Story, which is performing very well. Our focus is to keep improving the service.00:16:17:05 - 00:18:07:01Jamil Ghani: Prime has three stakeholders: members, sellers and creators. We aim to deliver value to members first. Over 60% of our global sales come from SMEs, and we expect that to grow in South Africa. On the content side, Prime Video works with creators globally across originals, rentals, and live sports.00:18:07:01 - 00:19:24:16Jamil Ghani: Prime Video is attractive globally because it gives creators international reach. We work with Bollywood creators, Middle Eastern, European and Latin American content that travels widely. That is central to our strategy.00:19:24:16 - 00:21:15:14Jamil Ghani: Live sport is an important part of Prime Video globally. I can’t speculate on South Africa, but in other regions we have football, NFL, NBA and UEFA Champions League. We work backwards from customers to decide what to offer.00:21:15:15 - 00:23:17:21Jamil Ghani: Gaming launches as part of Prime today, including downloadable games and Twitch benefits. It attracts new audiences who then discover the wider Prime ecosystem - shopping, entertainment and more.00:23:17:21 - 00:25:24:07Jamil Ghani: We work closely with suppliers and delivery partners. We are data-driven and maintain high standards. When issues arise, we collaborate to resolve them, but we may remove items if they cannot meet delivery and quality promises.00:25:24:12 - 00:27:34:19Jamil Ghani: Trust is critical. It takes a long time to earn and can be lost quickly. We use data and systems to identify issues and protect customer experience.00:27:34:23 - 00:28:47:17Jamil Ghani: Five years from now, success is simple: delivering disproportionate value. If customers feel Prime is indispensable, everything else follows. We focus on selection, price and convenience.00:28:47:19 - 00:31:11:02Jamil Ghani: South African consumers are well served and there is strong competition. That is good for customers and pushes us to improve. The pricing is intentional - we want customers to feel they are getting more value. Prime is something you experience, not something you are sold.00:31:11:02 - 00:32:01:12Jamil Ghani: Globally, Prime members saved around 105 billion dollars last year. Five years from now, I hope to see a similar measure of value for South African members - in savings, content, gaming and Prime Day benefits.00:32:01:12 - 00:32:25:17Alec Hogg: Jamil Ghani is the global head of Amazon Prime. I’m Alec Hogg from BizNews.