{"id":767746,"date":"2024-04-12T11:13:00","date_gmt":"2024-04-12T09:13:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=767746"},"modified":"2024-04-12T11:13:05","modified_gmt":"2024-04-12T09:13:05","slug":"trouble-for-takealot-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/767746\/trouble-for-takealot-in-south-africa\/","title":{"rendered":"Trouble for Takealot in South Africa"},"content":{"rendered":"\n

Amazon\u2019s US website is already the third most visited e-commerce platform in South Africa, and some experts believe local online retailer Takealot will struggle when Amazon officially launches its local online marketplace.<\/p>\n\n\n\n

According to the SpendTrend24 report by Discovery Bank, online shopping has seen a significant rise in South Africa, with its growth surpassing in-store spending.<\/p>\n\n\n\n

This growth rate has even exceeded that of other emerging market cities and matched that of cities in developed economies such as Sydney, San Francisco and Los Angeles. <\/p>\n\n\n\n

The report attributes this increase to the rise in global e-commerce platforms that now deliver to South Africa, aided by enhanced logistics and faster delivery times.<\/p>\n\n\n\n

Although Amazon’s South African website is still to launch later this year, it is already quite popular among consumers.<\/p>\n\n\n\n

According to data from the International Trade Administration, Amazon’s US website is the third most visited e-commerce site in South Africa. <\/strong><\/p>\n\n\n\n

Other global e-commerce sites South Africans enjoy include AliExpress, Shein, Wish, and eBay.<\/p>\n\n\n\n

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Tough times ahead for Takealot<\/strong><\/p>\n\n\n\n

Amazon has a broader range of products than its competitors, giving it an edge over local e-commerce platforms like Takealot. <\/p>\n\n\n\n

Speaking to Classic Business, Damon Buss<\/strong><\/a>, an equity analyst at M&G Investments, said Amazon is likely to gradually dominate in the local e-commerce space by offering a more comprehensive range of products than Takealot and providing personalised services to individual consumers.<\/p>\n\n\n\n

This broader catalogue can be chalked up to the retail giant’s global presence and highly efficient supply chain.<\/p>\n\n\n\n

For instance, when Amazon launched in Australia in 2017, it gradually expanded its operations until it reached a point where it became unbeatable.<\/p>\n\n\n\n

Amazon launched in Australia with 7.5 million products on its platform. Within five years, the number increased to over 200 million, making it the dominant e-commerce player in the country. <\/p>\n\n\n\n

According to Buss, the group’s “unrivalled customer analytics” and logistics setup are key to its success. It’s very likely that Amazon will dominate the e-commerce space in South Africa within five years as well, he said.<\/strong><\/p>\n\n\n\n

Buss explained that this would create a ‘flywheel effect’, where new products would attract more customers, enabling Amazon to learn more about their wants and needs and tailor their services accordingly.<\/p>\n\n\n\n

Despite this sentiment, the CEO of Naspers’ South African unit, Phuthi Mahanyele-Dabengwa, said the parent company is boosting investment into its South African online retailer ahead of Amazon’s expected launch in 2024.<\/p>\n\n\n\n

\u201cWe are well positioned to deal with whatever Amazon might bring,\u201d she said.<\/p>\n\n\n\n

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Takealot gearing up for Amazon showdown<\/a><\/blockquote>