South African online retailers like Takealot are under threat from international competitors like Amazon, Wish, and Shein which are rapidly growing in South Africa.
This is the warning from ecommerce expert and Parcelninja founder, Justin Drennan who was commenting on the local online shopping market.
Instead of establishing a local presence in South Africa, international ecommerce giants are growing their market share through improved cross-border logistics.
A good example is Wish’s recent partnership with the South African Post Office (SAPO) to strengthen its logistics capabilities and customer experience for local consumers.
Through this partnership Wish will be working directly with the Post Office to create a more consistent and efficient experience for their customers.
Wish said it will now be able to offer 50% faster transit times, end-to-end tracking visibility, delivery confirmation, and bundled shipments for multiple items.
It will also give its South African clients SMS and physical notifications on deliveries awaiting collection.
A first of its kind for SAPO, the partnership aims to provide a streamlined and efficient cross border logistics service to Wish’s growing user base in the region.
“South Africa is an important market for us and our partnership with SAPO will help us to provide faster time to door by 50% or more,” said Wish vice president of operations, Thomas Chuang.
“This is critical to ensuring a positive customer experience and satisfaction and will enable us to better serve our South African customers.”
Wish will now be able to offer similar delivery times and service levels as local retailers at a comparable delivery cost.
The company’s products are, however, much cheaper than local retailers because of its relationship with Chinese manufacturers.
Their direct-to-consumer business model provides customers with a wide range of products at the lowest price.
This model works, especially for price-conscious South Africans. Many consumers now buy from Wish instead of local retailers like Takealot or Loot.
The true scale of online purchases from international stores is difficult to establish, but a quick glance at the Android app ratings reveal how the market is changing.
The most popular shopping apps in South Africa are Shein and Wish – both international B2C ecommerce platforms.
Shein is an ecommerce platform designed to provide women fast fashion goods from China at cheap prices.
It competes directly with South African fashion retailers like Superbalist and Zando and is rapidly growing its market share in the country.
South Africans do not know, or care, where Shein ships its products from. The products are cheap, and they get their orders quickly. That is all that matters.
It is not only sites like Wish and Shein which are serving South African consumers from overseas.
Well-known fashion brands like Nike and Zara are selling products to South Africa and shipping it to buyers from their international warehouses.
It is virtually impossible for local retailers to compete against the likes of Wish, Shein, or even Amazon.
The scale of their operations and direct relationships with manufacturers offer South Africans unrivalled choice at much lower prices than local alternatives.
The only problem for international online shops selling products in South Africa was delivering the products fast and affordably.
They are now solving this problem through partnerships with the SA Post Office or courier companies.
It is not clear how local retailers like Takealot, Superbalist, or Loot will respond to this growing threat.