{"id":2118,"date":"2020-09-13T17:59:12","date_gmt":"2020-09-13T15:59:12","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=367034"},"modified":"2020-09-13T17:59:12","modified_gmt":"2020-09-13T15:59:12","slug":"takealot-targeted-for-its-dominance-in-south-africa","status":"publish","type":"post","link":"https:\/\/interwebdev.co.za\/index.php\/2020\/09\/13\/takealot-targeted-for-its-dominance-in-south-africa\/","title":{"rendered":"Takealot targeted for its dominance in South Africa"},"content":{"rendered":"
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Takealot is the biggest online store in South Africa by a significant margin, and it offers a wide selection of products across many categories and exceptional delivery services.<\/p>\n

The company has grown substantially over the past few years, aided by the success of its in-house delivery team which ensures quick turnaround times for online orders.<\/p>\n

Takealot\u2019s dominance is cemented through its successful economic strategy, although a number of retailers have expressed concern over the amount of power the company wields over South African ecommerce.<\/p>\n

An example of this power is evident through the process required to sell items through the Takealot Marketplace \u2013 a platform for third-party sellers to make their stock available through Takealot\u2019s online portal.<\/p>\n

While this marketplace has competitors, retailers have said the sales generated through Takealot completely dwarf those of other platforms.<\/p>\n

\u201cTakealot is probably 95% of our turnover,\u201d one seller told MyBroadband<\/strong><\/a>. \u201cFor every 30-40 orders on Takealot, we maybe do one on our own website.\u201d<\/p>\n

Takealot\u2019s significant investment in logistics and the quality of its service have led to it dominate the ecommerce industry locally, and smaller retailers who want to sell through its platform have to pay a cost to do so, forgoing a percentage of their revenue and autonomy.<\/p>\n

The online retail giant\u2019s success has not gone unnoticed by regulators, however, and the Competition Commission has taken a special interest in Takealot.<\/p>\n

Competition concerns<\/h3>\n

In a whitepaper titled \u201cCompetition in the Digital Economy\u201d, the Competition Commission identified the need for new regulations which would enable competition and prevent anti-competitive behaviour in a number of emerging industries.<\/p>\n

The document is sweeping, and it posits that the Commission\u2019s purview may extend to everything from the storage of personal data to promoting inclusion in the financial services sector.<\/p>\n

Takealot is mentioned explicitly, with the Commission noting that it wields significant power in the online shopping sector.<\/p>\n

\u201cThe most popular digital platforms around the world are widely used in South Africa but Internet usage takes on a local flavour in financial service platforms and e-commerce, where some traditional stores with an online presence and Takealot \u2013 which is part of the Naspers group \u2013 dominate the scene,\u201d the Commission said.<\/p>\n

It explained that digital markets are often \u201ctipping markets\u201d, which means there is an often a single dominant platform which expands to dominate the industry.<\/p>\n

In this respect, the Commission likened Takealot\u2019s dominance in South Africa to that of Amazon in the United States and Alibaba in China.<\/p>\n

Abuse of dominance<\/h3>\n

A number of concerns related to the abuse of dominance by companies such as Takealot were listed in the document.<\/p>\n

They included the following anti-competitive behaviours potentially enabled by the relative scale of these companies:<\/p>\n