The real winners of the Amazon vs Takealot battle in South Africa

 ·15 May 2024

It is unclear who will emerge as the leading e-commerce platform in South Africa in the fight for dominance between Takealot and Amazon, but what is certain is that consumers will be the real winners.

Amazon officially launched in South Africa on May 6, 2024. The platform offers a wide range of local and international brands across 20 product categories and promises to expand its offerings daily.

Amazon noted customers can expect competitive prices and same-day and next-day deliveries through Amazon’s courier partners, DPD Laser and The Courier Guy.

After its launch, everyone is watching how Amazon will affect South Africa’s top online retailer, Takealot.

According to the Online Retail in South Africa 2024 report, released this week by World Wide Worx with Mastercard, Peach Payments, and Ask Afrika, Takealot currently holds about 20% of the online retail market.

However, this share has dropped from around 25% over the past three years, partly because of the growth of 60-minute grocery delivery services like Checkers Sixty60 and Pick n Pay ASAP.

Amazon is expected to impact this market share further; however, in a rapidly growing market, it will also likely carve out its own space rather than take all its business from Takealot.

However, Takealot’s strong local presence, understanding of the South African market, and established infrastructure give it a strong advantage over Amazon, which will struggle with the intricacies of the South African eCommerce market.

Despite the hotly contested battle between these two players, several experts say the ultimate winner will be the everyday South African.

These include economist Dawie Roodt, World Wide Worx MD Arthur Goldstuck, and Mastercard country manager for Southern Africa Gabriel Swanepoel.

“Takealot and Amazon will fight for dominance in South Africa, and, in the process, prices will come down and services will improve,” Roodt said.

These improvements can already be seen in Amazon’s key focuses and Takealot’s response to Amazon’s arrival.

In an interview with the Sunday Times, Robert Koen, Managing Director of Amazon for sub-Saharan Africa, highlighted three key pillars that are important to customers.

He stated, “The first is product selection. The second is offering great value for money and reasonable prices. We want customers to know that every time they come to the store.

“The third piece is just that customer experience: same-day or next-day delivery, easy, convenient pickup points, and easy returns.

“And we know that formula works very well in every country where we operate,” he said.

Takealot swiftly responded to Amazon’s launch with lower prices and improved services, which already started last year.

In August 2023, Takealot introduced delivery within an hour for items ranging from phone chargers to toys.

Goldstuck added that another benefit would be increased investment in courier logistics in South Africa.

The rapid delivery service was initially offered in parts of Cape Town, where Takealot parent Naspers Ltd. has its headquarters, before expanding more widely.

Additionally, shortly after Amazon South Africa launched, Takealot introduced a monthly subscription service that provides free delivery and order collection on its online store.

“All of those factors provide more choice to the broader population. And from that perspective, it means that, ultimately, it benefits the end consumer, which is great for the economy,” said Swanepoel.

“We’re going to see significant growth. It’s a good news story,” he added.

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