One online store in South Africa is cheaper than Checkers and Pick n Pay

A MyBroadband comparison shows that Amazon.co.za offers better prices on numerous grocery products and other fast-moving consumer goods (FMCG) than Takealot, Checkers, and Pick n Pay.

Amazon Sub-Saharan Africa managing director Robert Koen recently revealed that its Everyday Essentials category recorded the highest number of sales in its first year in South Africa.

“These include items such as toilet paper, dishwasher tablets and dishwashing liquid, liquid hand wash, bleach, steam irons, nappies, shampoo, body wash, multipurpose cleaner and sunscreen,” he said.

According to research from Nielsen IQ, South African consumers are increasingly shopping online for groceries and FMCG and are more intentional about their purchasing decisions in this category.

Online marketplaces are well-positioned to capitalise on this trend, as they have lower operating costs than conventional brick-and-mortar retailers.

Third-party marketplace sellers also source products from a wider range of distributors and are naturally encouraged to offer the best prices due to competition from other sellers on the same platform.

MyBroadband compared Amazon’s prices for 20 popular grocery and FMCG items in South Africa with those of its biggest online rival, Takealot, and the two largest grocers in South Africa, Checkers and Pick n Pay.

Our basket consisted of popular condiments, spices, cereals, cleaning liquids and materials, beverages, toiletries, and other FMCG items.

We found that Amazon had the cheapest prices on 18 of the chosen products and the most affordable basket overall, with a combined price of R1,353.43.

Checkers was the second most affordable with a total basket price of R1,638.80, followed closely by Pick n Pay with R1,653.80.

With a total basket price of R2,133, Takealot was about 58% more expensive than Amazon.co.za. It was also the most expensive for 18 of the 20 products.

The main reason for this big difference was that some Takealot sellers had products listed at several times the market price.

For example, a Vaseline Blue Seal 50ml bottle that cost between R15 and R20 from the other retailers was R120 from one Takealot seller.

Seller versus customer focus

Takealot shoppers have regularly criticised the store for seemingly giving its sellers free rein when it comes to setting pricing, leading to the creation of price comparison tools like Serval Tracker.

Amazon is well known for its strict seller policies. While it also allows some freedom in price-setting, the retailer demotes listings with uncompetitive pricing.

It does this by comparing at which its sellers list their items with prominent retailers. If they are not aligned with the market or better, it removes the “Add to Basket” button from the listing in search results.

Customers must click through to a listing to add an item to their basket. Although this price parity approach is controversial with competition watchdogs, it can also be argued to be pro-consumer.

The biggest downside to shopping at Amazon.co.za compared to Checkers or Pick n Pay was that its range was far more limited.

However, the product selection is likely to expand as Amazon grows its seller base and first-party offerings, which it is doing based on customer feedback and demand.

The table below shows the prices of 20 grocery or FMCG items from the four retailers we compared.