South Africa’s Competition Commission Claims Amazon unlikely to ‘displace’ Takealot in South Africa
Although the retail behemoth, Amazon, is reportedly launching in South Africa, the Competition Commission claims it is doubtful that it can unseat current leaders like Takealot.
The commission released its Online Platforms Market Inquiry’s findings on Wednesday 14 July, and many issues with Takeloot’s dominance as well as those of other significant companies like Uber Eats and Google are raised. Takealot also owns delivery service Mr D and online fashion store Superablist under its local umbrella.
“The investigation is also aware of the reports that Amazon will enter the South African eCommerce industry, but we have not received any confirmation from Amazon themselves.
According to the commission, Amazon’s global power and potential brand appeal is likely to see it establish itself as one of the top eCommerce platforms alongside Takealot, but unlikely to fully displace it.
“The inquiry provisional findings are likely to remain robust to such an eventuality, as these are predominately in respect of market features and common platform behaviour, but any provisional recommendations would need to be extended to both leading platforms.”
Amazon Planning its Takeover
Reports have shown that Amazon plans to expand at least five new territories in the coming year including Belgium, Chile, Colombia, Nigeria, and South Africa.
Amazon is Coming. Beware Jumia
MyBroadband revealed in January 2022 that Amazon was looking into South African warehouse space. Regarding its ambitions for the facilities, Amazon remained silent, but industry rumors stated that it was preparing to introduce online shopping services.
MyBroadband has now heard, nevertheless, that Amazon has negotiated terms with courier services and regional fast-moving consumer goods (FMCG) merchants and has secured warehouse space in South Africa.
Amazon claims to have created more U.S. jobs in the last decade than any other company. These jobs pay at least $15 per hour, more than double the federal minimum wage, and come with comprehensive, industry-leading benefits. However, the commission is adamant of this prowess and claims that Naspers-owned Takealot will still best the global e-commerce giant.
About Takealot
Former MWEB CEO Kim Reid and the US-based investment company Tiger Global Management purchased the South African e-commerce company Take2 in October 2010 and renamed it takealot.com. Takealot.com was formally offered to the public in June 2011.
In 2014, takealot.com acquired Mr Delivery (now known as Mr D Food) and Superbalist.com, a fashion e-tailer, and successfully established its own on-demand food delivery business. The combination between Takealot.com and Kalahari.com was announced that year. In May 2015, the transaction was successfully completed.
Takealot.com was the first local retailer to participate in Black Friday, and it has since grown to become the largest online retailer in the nation. The startup has contributed to the expansion of internet shopping in South Africa. As of November 2019, more than 2500 outside vendors were selling to more than 1.8 million takealot.com customers.