Local Insight vs Global Might: Takealot Prepares For Amazon Challenge In SA

By  |  December 4, 2023

Global consumer internet group Naspers and its subsidiary Prosus Group are gearing up for a showdown against Amazon as they prepare to beef up their backing for Takealot, South Africa’s top e-tailer. Basil Sgourdos, CFO of both Naspers and Prosus Group, expressed confidence in Takealot’s ability to compete, citing the company’s robust resources and determination.

During Naspers’ company results presentation, Sgourdos emphasized their commitment to investing in Takealot’s growth and ensuring its competitiveness in the market, reports Sunday Times. Interim CEO Ervin Tu echoed this sentiment, highlighting their readiness to face Amazon’s comprehensive entry strategy targeting both consumers and sellers.

Tu emphasized, “We welcome competition; we are untroubled by it,” indicating their preparedness across various fronts. Additionally, Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa, stressed the significance of local knowledge, suggesting Takealot’s advantage in navigating the South African market compared to global players like Amazon.

As Amazon gears up to launch its Amazon.co.za marketplace with plans to onboard local sellers, the competition is expected to benefit South African consumers. Amazon’s approach mirrors its global strategy, aiming to attract independent sellers by significantly reducing seller fees. This move is likely to prompt Takealot to reconsider its pricing strategies and seller fees.

The Competition Commission, foreseeing the impact of this market battle, has imposed strict conditions on Takealot and is anticipated to do the same for Amazon. Engaging with Amazon prior to its entry, the commission is ensuring compliance with regulatory provisions.

However, Amazon faces challenges in matching Takealot’s established infrastructure that ensures high service levels. To gain a foothold, Amazon might rely on competitive pricing strategies initially, attempting to capture market share from Takealot.

As the stage is set for a showdown in one of Africa’s leading online retail markets, the entry of Amazon into this space is expected to reshape pricing dynamics and competition regulations, potentially altering the landscape for consumers and existing e-commerce players.

Featured Image Credits: Mybroadband

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