US online retailer Amazon.com has opened a new customer service and development centre in Cape Town. The centre will support its customers in North America, the UK and Germany. It will also be home to the development team working on projects for Amazon’s Web services business.

Marc Onetto, senior vice president of operations and global customer services at the online retailer, says Amazon has had a technical centre in Cape Town for some time. But a little less than a year ago it began to develop customer service operations in SA.

Amazon’s Cape Town facility is one of about 20 similar centres around the world, and the company expects it to employ 1 400 people in permanent positions by the end of the year.

Onetto says Amazon will undertake two activities in Cape Town. One is a development centre — engineers working on Amazon cloud services — creating new products. The other is the new customer service operation.

“These aren’t the only service centres for these regions, but this is the only one supporting German customers outside of Germany,” Onetto says.

He says Amazon chose SA because of the service culture it found in the country. He says the diversity of cultures on offer was also appealing, and that the company has managed to source a large number of German speakers in Cape Town to support its customers in Europe’s largest economy.

“The third reason has to do with SA’s position – both latitude and longitude. The latitude makes it special because of the weather, and the longitude because of the time zone,” says Onetto.

James Greenfield, an expatriate who has lived in Seattle, where Amazon’s head office is located, for the past three years is head of the Amazon Development Centre in Cape Town. He says the company was impressed with the engineers it in SA. “I’ve hired engineers both here and in the US, and the SA engineers are right up there,” he says.

Onetto won’t say how much the expanded operation is costing Amazon, but says it helps diversify where its support centres are located. The company also sees the new centre as a way of finding and developing local talent while affording South Africans the opportunity to work for a global company.

Though Amazon does not yet have any plans to localise its cloud computing infrastructure, Greenfield says the company “is open to the prospect in future”.

As far as extending a retail distribution presence to SA is concerned, Onetto says size of the market, penetration and speed of Internet and the delivery logistics infrastructure are the factors that Amazon considers when offering retail services in a new region. “SA doesn’t quite measure up yet,” he says.

He adds that, even when shipping from Amazon stores abroad to SA customers, the company has experienced problems with both delivery reliability and taxes at the country’s borders.

Onetto says SA shoppers buying media products on Amazon’s UK site are eligible for the company’s “Super Saver” discounts for delivery, with sufficiently large orders shipping for free. Customers are, however, still billed in pounds rather than local currency.

Greenfield says the big motivation for Amazon to set up shop in Cape Town came from it’s experience setting up a development team under Chris Pinkham. He says that experience was a positive one and laid the groundwork and made Amazon believe it was possible to run a successful centre in SA. — Craig Wilson, TechCentral