Amazon unlikely to ‘displace’ Takealot in South Africa: commission

 ·14 Jul 2022

The Competition Commission says it is aware of reports of retail giant Amazon launching in South Africa, but says it is unlikely to overthrow existing players such as Takealot.

The regulator published the findings of its Online Platforms Market Inquiry on Wednesday (14 July) which raises numerous concerns with Takelaot’s dominance, as well as other major players such as Uber Eats and Google.

“The inquiry is also aware of the rumours of Amazon’s entry into SA’s eCommerce market but has not had any confirmation of such from Amazon itself.

“If it were to enter, then Amazon’s global strength and potential brand appeal is, on balance, likely to see it establish itself as one of the leading eCommerce platforms alongside Takealot, but unlikely to completely displace it,” the commission said.

“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 in South Africa 

Amazon is expected to launch an online marketplace in South Africa as part of a global expansion in the coming year.

Leaked documents seen by Business Insider (paywalled) show the retail giant plans to expand at least five new territories in the coming year including Belgium, Chile, Colombia, Nigeria, and South Africa.

Amazon’s launch plans for South Africa – codenamed ‘Project Fela’ – shows the company expects to launch its marketplace in South Africa in February 2023. This will include its own marketplace and the launch of the Prime membership programme. The country also plans to launch in Nigeria in April 2023 under the same project codename.

In January 2022, MyBroadband reported that Amazon was shopping around for warehouse space in South Africa. Amazon did not comment about its plans for the warehouses, but industry speculation suggested that it was looking to launch online shopping services.

However, MyBroadband has since learned that Amazon has secured warehouse space in South Africa and is now in discussions with courier companies and local fast-moving consumer goods (FMCG) retailers.

Amazon faces competition in the online shopping space, most notably from Naspers-owned Takealot. Takealot also owns delivery service Mr D and online fashion store Superablist under its local umbrella.

Read: Takealot, UberEats, Google and others under fire in South Africa online market inquiry – here are all the major findings

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