Amazon's Controversy Over Entry into Africa This Time

River Club construction site (Photo by WSJ)

[Asia Economy Reporter Yujin Cho] The Wall Street Journal (WSJ) reported on the 23rd (local time) that Amazon, the world's largest e-commerce company, has become embroiled in political controversy over its plan to establish a regional headquarters in South Africa as part of its strategy to target the African continent.

Amazon's plan is to use Cape Town, the capital of South Africa, as a base to target the African region where smartphone demand is rapidly increasing, but it has faced opposition from local indigenous people and civil society.

According to reports, the project is in jeopardy due to controversy surrounding the redevelopment of the River Club in Cape Town, which Amazon had selected as the site for its African regional headquarters.

Amazon was planning a large-scale mixed-use development project on the River Club site, investing $350 million (approximately 410.4 billion KRW) to include office, residential, and green spaces.

Amazon already has offices in downtown Cape Town but has been expanding its investment scale in line with the growth of the African market, including South Africa.

The site is historically significant as the location of a battle in 1510 between the local indigenous Khoikhoi people and the Portuguese, before the Dutch East India Company established a supply base in what is now Cape Town. Indigenous groups such as the Khoisan strongly oppose the redevelopment of the River Club.

The local indigenous people criticize that the heritage and historical value of this site, where a historic battle took place, are being damaged by Amazon's development.

They also condemned the City of Cape Town's support for Amazon's regional headquarters, which claimed that it would lead to high employment and economic opportunities and enhance the city's status.

Africa is considered a market with high potential despite increasing smartphone penetration due to poor infrastructure and limited logistics systems.

Amazon plans to tighten its grip on the African market by using Cape Town as a forward base. Amazon expects that the establishment of the regional headquarters in Cape Town will create about 20,000 new jobs.

Meanwhile, Amazon attempted to establish its second headquarters in Long Island City, Queens, New York, in 2018, but the plan was scrapped due to protests from local civil society.

At that time, when New York City passed an ordinance granting tax benefits worth $1 billion to attract Amazon's second headquarters, protestors opposing the plan occupied the New York City Hall and continued demonstrations, leading Amazon to abandon the project amid strong opposition.

This content was produced with the assistance of AI translation services.