Online retail giant and Fortune 500 company Amazon is expanding its customer services and development team in Cape Town to create 600 permanent jobs by the end of the year and employ a further 400 temporary employees during peak periods. This adds to the 250 people Amazon already employs in its Cape Town call centre.

The centre, one of eight global service centres outside the US, serves both the American and German markets. Amazon does not deal directly with SA and there is no distribution centre in the country. The move is seen as a vote of confidence for outsourcing to SA.

Nils Flaatten, CEO of the Western Cape Investment & Trade Promotion Agency, said Amazon is just one of many companies that has turned to SA, especially Cape Town, for outsourcing. Cape Town is ideal, he said, because employees are equipped to deal with “high touch” or more complicated questions and the city offers good people skills and a robust infrastructure.

Amazon said the Cape Town call centre is very different from others in its stable and operators do not use scripts. “Amazon is customer-obsessed and that drives everything we do,” said Scott Sommers, senior site leader at the centre. “When a customer calls in we want to solve his or her problem above all else and our employees are empowered to do what’s right for the customer.”

There is also greater cultural affinity with German and American markets — more so, Flaatten said, than call centres in India. Broadband pricing had also been reduced, making SA more competitive. “We can offer a niche business processing opportunity whereby we can process customer data.”

Other businesses have also taken to outsourcing, Flaatten said. Overseas banks such as Close Brothers, HSBC and Credit Suisse have established themselves in Cape Town.

Google launched one of its incubators in the city and Royal Dutch Shell and Lufthansa run call centres here. In 2006, the SA government identified the business process outsourcing and offshoring sector as one of the top-three priority sectors to stimulate growth in its accelerated shared growth initiative.

Flaatten said the opportunities from Europe are huge, given recent announcements such as that by Barclays, which said it would cut 3 000 jobs. “There are cost pressures in Europe and we can do that work here.” Europe, Flaatten said, is the traditional market to which SA looks but there are more opportunities in big markets such as the US, which is now being forced to look at cheaper options.

Outsourcing, Flaatten said, is not just about call centres but about the business processing continuum that includes services such as IT support, financial accounting and data analytics. Amazon also has a software development centre in Cape Town, but it maintains a low profile. — Lisa Steyn, Mail & Guardian