[ad_1]
Many ways to pay: Chief executive of Takealot Mamongae Mahlare says that Amazon’s entry into the local market won’t be easy for them but will stimulate investment in e-commerce.
South Africa’s e-commerce market is preparing for what looks to be a David vs Goliath showdown, with behemoth Amazon’s imminent incursion.
But Takealot, the country’s largest player, won’t be taken down without a fight, according to the group’s chief executive Mamongae Mahlare.
“Rest assured, we have every commitment to be a compelling player and to continue to be a relevant player in e-commerce for generations to come,” Mahlare said in an interview with the Mail & Guardian on Tuesday.
“Is it going to be easy? We don’t expect it to be.”
Earlier that morning, Amazon officially announced the launch of its South African platform in 2024 — a development which stands to radically alter the country’s still-small e-commerce market.
According to Mahlare, the Amazon invasion could benefit the market — if handled correctly.
“We also expect that the competition will stimulate further adoption and greater investment in e-commerce. And if it contributes towards educating South Africans and getting more South Africans to buy online, then we will be able to grow the size of our pie,” she said.
“Then there will be greater benefits overall for the market and for each of the players.”
Amazon’s entry raises big questions about competition in the South African market, an issue that has vexed local regulators in recent years — and which has put Takealot in their crosshairs. Amazon’s net sales hit $513 billion in 2022. Takealot’s revenue was a fraction of that at $827 million at the end of its 2022 financial year.
The Competition Commission’s final report on the matter, published in August, identified Naspers-owned Takealot as a clear leader in South Africa’s e-commerce market, noting that smaller businesses wishing to trade online are highly dependent on its platform.
The competition watchdog found that Takealot prohibited retailers from selling certain brands in competition with the e-commerce company’s own retail division and used seller data to inform said retail offering.
The report’s findings also suggest that Takealot’s self-preferencing distorted competition with its marketplace division, through which third-party sellers trade. As a result, the Competition Commission ordered Takealot to segregate its retail division from its marketplace operations.
“The question to be asked is, how will Amazon be treated by the Competition Commission, given all the asks they have made of our business?” Mahlare said on Tuesday.
“Will they ask the same of Amazon? Because they are a global behemoth. They are not a small player by any stretch of the imagination … How do you ensure that there is an even playing field here?”
Amazon isn’t Takealot’s only problem, with the South African company also facing an incursion from the East in the form of Chinese fast fashion retailer Shein.
“When we are competing on an even playing field,” Mahlare said, “then it’s really about who is serving the customer’s best interests — and who is continuing to ensure what they are offering is relevant. And you innovate accordingly.”
Shein’s low prices, however, make this even playing field incredibly difficult to imagine.
“We know the cost competitiveness that China has. Nobody can beat that anywhere in the world. So what is required from our government is to ensure that those transactions get the right duties applied to them so that they pay their fair share in terms of supporting the fiscus,” Mahlare noted.
“Because every other South African-based business is paying tax, is paying VAT, is paying import costs on material to make clothing locally. And if we want to protect the clothing and textile masterplan and to make sure that the industry continues to survive, we have to think about how we put South Africa first.”
Despite coming under scrutiny by the Competition Commission for its treatment of its small sellers, Mahlare underlined the importance of a platform like Takealot for empowering fledgling entrepreneurs.
Takealot has grown the number of sellers in its marketplace from 124 in 2014 to about 8 000 today. With Amazon opening registrations for third-party sellers on Tuesday, time will tell whether its South African platform will be similarly attractive to small businesses.
“We have seen people who started from zero being able to get immediate access to the market. We have about four million active customers on our platform and we deliver to almost anywhere in South Africa. That is a key part of our value proposition,” Mahlare said.
Commenting on the Competition Commission’s inquiry, Mahlare maintained that Takealot has not conducted itself anti-competitively. “Second of all — given the agenda around enabling SMEs and previously-disadvantaged individuals to be able to get a step up into the economy — what we offer every single day is exactly that,” she said.
“So shouldn’t you be asking what can be done to support businesses like our own so that we can multiply and scale what we are doing? … When you look at the facts, it’s pretty clear that platforms like ours are powerful in terms of economic participation and democratising access to opportunities.”
[ad_2]
Source link