On 14 May, the Department of Trade, Industry, and Competition published new regulations which allow unlimited ecommerce in South Africa.
The new regulations state that all goods may be transacted through ecommerce platforms, except for alcohol and tobacco products.
Speaking to Bruce Whitfield on The Money Show, Takealot CEO Kim Reid welcomed the decision to allow unrestricted ecommerce to take place.
The regulations require ecommerce companies and delivery personnel to adhere to strict rules to operate, however, but Reid said this is nothing new.
He said they have had strict health protocols in place for both their warehouses and logistics channels since the lockdown started in March.
This means ecommerce is a segment which can operate with a far lower risk of COVID-19 transmissions than brick-and-mortar retail channels.
The regulations also require online retailers to give prominence to those goods which are manufactured in South Africa.
This, Reid said, is an interesting inclusion in the regulations – but will not affect Takealot’s operations.
He said Takealot has a position on its site where they are championing local good and local businesses.
“We are an enablement platform. This country sorely needs enablement platforms and places for businesses to operate freely, employ people, and make some money,” he said.
There are concerns that many online shops will struggle to keep up with demand now that the regulations have changed, especially as there is still limited manufacturing and import restrictions.
Reid said the government needs to look closely at what it wants to achieve, and act accordingly. “I am sure we are going to see a different frustration in their business in the next few weeks and months on the supply side,” he said.
When it comes to Takealot’s own platform, he is confident they will be able to deliver between 95% and 96% of all parcels on time – if not more.
“We gear ourselves every year for peaks like Black Friday and December. This is another great opportunity to build the business out, build the logistics business out, and offer more people more jobs,” he said.
The products which are likely to sell the best
Reid said there has been pent-up demand for many products because of the lockdown restrictions, and he gave predictions on which products he expects to sell the best.
- TVs will be the first to go.
- PlayStations are going to be the next to go.
- Toys are going to be in high demand.
- Large appliances like fridges, washing machines, tumble dryers, and stoves are going to be in high demand because of breakdowns during the lockdown.
“Up to now, it has been such a difficult period to try to pick and choose what you are selling and to make sense of the regulations. Now we do not have to make sense of the regulations, we can just sell everything,” Reid said.