Takealot CEO breaks silence on Amazon’s expected launch in South Africa

Takealot Group CEO Mamongae Mahlare says the potential launch of an Amazon marketplace in South Africa in 2023 is a “compliment” to Takealot and its customers.

In an interview with Bruce Whitfield’s The Money Show on Talk 702, Mahlare seemed to credit Takealot for Amazon’s interest in South Africa.

“It’s a great compliment to Takealot and the people that have built this business to where it is today, and our customers in South Africa that have supported that growth,” Mahlare said.

“It demonstrates that we have built something that has built an investment case good enough for global companies like Amazon to want to come here.”

But Whitfield questioned whether Takealot’s majority investor — Naspers — would be willing to enter into a “digital war” with the global commerce giant given that Takealot was not showing the same level of growth as its businesses in other regions.

After more than a decade in operation, the dominant South African online retailer has not yet reached profitability.

Mahare maintained that Naspers has invested in Takealot for the long run and held a long-term view of the company’s potential.

Amazon’s imminent arrival in South Africa has been rumoured for 12 years.

However, there have been several developments in recent months that strongly suggest it is finally pulling the trigger on such a move.

MyBroadband first learnt that Amazon was looking for warehouse space in January 2022, leading to speculation that it could enter the local ecommerce market.

In June 2022, Business Insider reported obtaining documents detailing Amazon’s plans to expand its marketplace into five new countries in Africa, South America, and Europe.

Adding even more credibility to the potential launch, Amazon recently posted job listings for two managerial roles at its “ZA marketplace”.

Ecommerce experts previously told MyBroadband that Amazon could shake up the local ecommerce space by giving small businesses an alternative platform to sell their products on.

Many Takealot sellers have a negative view of the company’s buyer-first approach, which has made its processes for sellers expensive and rigid.

However, Takealot has a vast local logistics network and has built a solid reputation as a go-to online retailer for many South Africa.

Former Takealot CEO Kim Reid previously said the retailer was shipping an average of 35,000 orders per day by November 2019.

But that is still orders of magnitude short of Amazon’s figures.

In 2019, it had shipped 1.9 billion packages across the globe, working out to roughly 5.2 million shipments per day.

Amazon also has no shortage of funding to quickly hit the ground running to expand its logistics capabilities and marketing campaigns.

The company also offers a solid value proposition to customers with its Prime subscription, which bundles various streaming services, delivery perks, and exclusive deals for a monthly or annual fee.

The service had more than 200 million subscribers across the globe by April 2021.

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Takealot CEO breaks silence on Amazon’s expected launch in South Africa