Fight for dominance between Takealot and Amazon South Africa

Award-winning economist Dawie Roodt said consumers will be the big winners in the fight for dominance between Takealot and Amazon South Africa.

Roodt’s comments came after Amazon’s long-awaited marketplace launch in South Africa last week.

The service is available to South Africans through www.amazon.co.za or by downloading the Amazon shopping mobile app.

Amazon offers local shoppers a selection of local and international brands across 20 product categories.

It promises competitive prices and same-day and next-day delivery through its courier partners — DPD Laser and The Courier Guy.

For products fulfilled by Amazon, customers will enjoy free delivery on their first order, followed by free delivery for subsequent orders above R500.

Many people expected Amazon to launch with a big bang and quickly become the dominant e-commerce player in South Africa. However, this will not happen.

Roodt highlighted that it will not be easy for Amazon to compete against local online shops like Takealot.

Takealot is well-established and knows the local market well. It also has excellent logistics and a growing user base.

“Takealot and Amazon will fight for dominance in South Africa, and, in the process, prices will come down and services will improve,” Roodt said.

Andy Higgins, Bob Group managing director

Bob Group managing director Andy Higgins shared Roodt’s view, saying Amazon’s success in South Africa is far from guaranteed.

Compared to other American tech giants, such as Google and Facebook, Amazon will have a much harder time operating in South Africa.

“There is a big difference with e-commerce that makes it more challenging, and that is the logistics component.”

“While Amazon uses third-party logistics providers, local e-commerce players can compete by owning and controlling their own logistics,” Higgins said.

He said Amazon likes to control and own its own logistics in the countries in which it operates. However, it is unlikely to do so in South Africa.

Higgins said there is space for many platforms to co-exist, and Amazon’s arrival will uplift the entire e-commerce industry and force competitors to improve their customer experience.

World Wide Worx MD Arthur Goldstuck said another benefit is increased investment in courier logistics in South Africa.

“Courier logistics in South Africa is moving to a level in South Africa which is comparable with the best in the world,” he said.

Frederik Zietsman, Takealot Group CEO

It did not take long for Takealot to respond to Amazon’s launch with lower prices and improved services.

Shortly after Amazon South Africa launched, Takealot introduced a monthly subscription service that provides free deliveries and collection of orders on Takealot.com and Mr D.

The service, named TakealotMore, offers two subscription tiers — TakealotMore Standard at R39 per month and TakealotMore Premium for R99 per month.

For orders with a minimum value of R500, the Standard plan offers two free same-day deliveries per month and unlimited free next-day deliveries and collections.

Premium provides unlimited same-day, next-day, and standard deliveries and collections for Takealot orders.

Takealot Group CEO Frederik Zietsman said that TakealotMore would “redefine convenience and value” for millions of South Africans.

“TakealotMore has been built with a budget-friendly tiered approach so that every Takealot customer can experience more with every shop,” he said.

Zietsman added that further perks will be introduced to TakealotMore in the near future, as the subscription will be an ever-evolving experience.

Takealot also cut the price of many products by up to 50% following Amazon’s local launch, cheekily calling it ‘Amazin deals’.

“Takealot is clearly going head-to-head with Amazon,” Goldstuck said.