Naspers in firing line for online dominance in South Africa

The Competition Commission will conduct a market inquiry into South Africa’s ecommerce industry, and Naspers is front and centre in this investigation.

Naspers was founded in 1915 as a publisher and printer of newspapers and magazines, but after listing on the JSE in 1994 it transformed into a global internet group.

It invested in numerous technology companies, including buying a 46.5% stake in Tencent for $32 million 2001. This turned out to be one of the best investments in history.

Today Tencent’s market cap is $855 billion, and while Naspers’s shareholding was reduced to 31.1%, it remains by far the biggest investment in its portfolio.

The Tencent investment helped Naspers to become South Africa’s largest company with a market cap of R1.58 trillion.

Naspers used its Tencent investment as a launchpad into the online industry with investments into big Internet players like Delivery Hero, Code Academy, Udemy, PayU, FlipCart, and

While most of Naspers’ investments are international, it also spent billions on growing its online presence in South Africa.

Naspers’ South African Internet properties include Takealot, Autotrader,, OLX, Property24, and Careers24.

Many of these companies dominate their industries, including in online publishing, Takealot in ecommerce, and Autotrader in online motoring classifieds.

This has attracted the attention of the Competition Commission, which said it has reason to believe that there exist market features that impede, distort, or restrict competition in the online space.

It has subsequently launched a market inquiry that focuses on online intermediation platform services in South Africa.

James Hodge

James Hodge, the chief economist at the Competition Commission, said they have seen some online platforms in South Africa becoming dominant in their respective market segments.

“There is a risk that their dominance becomes nearly irreversibly entrenched,” said Hodge.

This action from the Competition Commission is therefore aimed at ensuring that the market is functioning well and that there is competition happening.

They want to be certain that nothing is hindering competition or prevent the public interest objectives of the competition act, like small businesses competing in the market.

The following sectors would be investigated as part of the inquiry:

  • Ecommerce marketplaces
  • Online classifieds
  • Travel and accommodation aggregators
  • Short term accommodation intermediation
  • Food delivery
  • App stores

Naspers features prominently in many of these segments, and it is a clear target in the Competition Commission’s investigation.

“The Naspers Group features across many of these markets providing scope for conglomerate advantages such as customer data exchange, cross-promotion and self-preferencing, as well as scope economies in distribution,” the Competition Commission said.

It added that Naspers is also acquiring stakes in existing and start-up platforms in these markets domestically.

The commission said there are clear market leaders and dominant platforms emerging across several online intermediation platform markets, as shown below.

Intermediation platform services in South Africa
Platform Dominant Players Owner
Ecommerce Takealot Naspers
Food delivery Mr D Naspers
UberEats Uber
Property classifieds Property24 Naspers
Private Property Caxton/Cognition
Car classifieds Autotrader Naspers
Home-sharing accommodation Airbnb Airbnb
Travel aggregation TravelStart Travelstart Online

The Competition Commission said the inquiry is broadly focused on three areas of competition and public interest, namely:

  • Market features that may hinder competition amongst the platforms themselves.
  • Market features that give rise to discriminatory or exploitative treatment of business users.
  • Market features that may negatively impact the participation of SMEs or HDI-owned firms.

Whilst the inquiry will consider how consumer and business data advantages may shape competition, the inquiry will specifically exclude broader data privacy issues.

The current draft terms of reference of the market enquiry are open for public comment until 12 March 2021.

The final report is expected to be published before the end of next year.

James Hodge interview

Now read: Takealot’s dominance in South Africa to be investigated by Competition Commission

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Naspers in firing line for online dominance in South Africa