Takealot’s answer to Amazon Prime – and its other big plans for the future

Given its size and dominance in South Africa’s online space, it’s easy to draw comparisons between Takealot and Amazon.

As both websites continue to grow, there has been increasing cross-over in their offerings with Takealot also offering open-box deals and goods from third-party sellers.

However, arguably Amazon’s stand-out service is its Amazon Prime subscription service.

For $10 a month, Prime subscribers receive a number of perks including free ebooks, music and video streaming.

Its biggest selling point however is free delivery of over 50 million items within two days or less.

Speaking to BusinessTech, Takealot CEO Kim Reid said that Takealot would likely include a “Amazon Prime-like” service at some point in the future, but was currently unable to find a financial model that would make it viable in South Africa.

“We really have been actively looking at Prime but have not been able to find a model,” said Reid. “A service like Prime increases the frequency of purchases, but drops your average order value (AOV).

“The higher the AOV, the more you can do – including reinvesting back into the system, but when your AOV is lower it also  all of a sudden makes delivery much more difficult.

“We will roll something out, I just can’t say for certain what exactly it will look like when we do,” he said.

Reinvesting back into the site

Two things which will not be making their way over from Amazon anytime soon are fresh groceries and certain digital/streaming services.

Reid explained that e-books (which are offered as part of Amazon’s Kindle) had seen a drastic decline in popularity on Takealot, while he felt that the company could not offer anything new in the streaming arena which is growing increasingly expensive to enter.

Instead, Takealot’s primary focus was to get into basic profitability so that it can use this money for reinvestment.

Specifically some of the biggest changes will be made to the site directly, said Reid.

“This includes encouraging more sellers onto the platform, offering more options to customers and finding more convenient ways to deliver products.

“We will also focus around marketplace looking at brands such as Superbalist, improving customer discovery (inlcuding improved search functionality), and plan to add automatic pricing so that we can quickly address low prices and not miss out due to arbitrage.”

Reid also said that the site’s look and basic functionality will see changes, including a number of improvements to the left-hand navigation bar.

New developments

While Takealot will continue to improve to its platform, Reid did indicate that the group was currently working on two other areas.

The first of these will be the introduction of “white goods” (large electronics) – including major appliances such as dishwashers and washing machines.

He said that Takealot was also looking at other furniture offerings following the success of its Simba “bed in a box”, which had seen over a 100 orders in the week leading up to Black Friday alone.

The second new development being considered by Takealot is the option to offer pick-up collection services.

Currently, Takealot customers can only pick up orders from the website’s Cape Town warehouse, but Reid said that Takealot was looking at which of its distribution centres around the country could facilitate also being a pick-up point.

This he hopes will benefit both Takealot and its customers, as rescheduling orders remained one of the most difficult parts of the delivery process, he said.


Read: Takealot is preparing for a massive Black Friday sale – up to 80% off

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Takealot’s answer to Amazon Prime – and its other big plans for the future