Amazon unlikely to ‘force out’ Takealot from South Africa: Commission

The Competition Commission says it is aware of reports of retail giant Amazon opening in South Africa, but says it is unlikely to topple existing players such as Takealot.

The regulator released the results of its study of the online platform market on Wednesday (July 14), raising numerous concerns about the dominance of Takelaot, as well as other big players such as Uber Eats and Google.

“The investigation is also aware of rumors of Amazon entering the South African e-commerce market, but there has been no confirmation of this from Amazon itself.

“If it enters, Amazon’s global strength and potential brand appeal could ultimately see it become one of the leading e-commerce platforms alongside Takealot, but is unlikely to completely displace it,” the commission said.

“Preliminary results of the investigation are likely to remain robust to such a case as they predominantly address market specifics and overall platform behavior, but any preliminary recommendations need to be extended to both leading platforms.”

Amazon in South Africa

Amazon is expected to launch an online marketplace in South Africa as part of its global expansion next year.

Leaked documents seen Business Insider (paid access) show that the retail giant plans to expand at least five new territories next year, including Belgium, Chile, Colombia, Nigeria and South Africa.

Plans to launch Amazon in South Africa, codenamed “Project Fela,” show that the company expects to launch its marketplace in South Africa in February 2023. This will include its own marketplace and the launch of the Prime membership program. The country also plans to launch in Nigeria in April 2023 under the same project code name.

January 2022 MyBroadband reported that Amazon was eyeing warehouse space in South Africa. Amazon has not commented on its warehouse plans, but industry speculation suggests it wants to launch online shopping services.

However, MyBroadband has since learned that Amazon has reserved warehouse space in South Africa and is in talks with courier companies and local FMCG retailers.

Amazon is facing competition in online shopping, primarily from Naspers-owned Takealot. Takealot also owns Mr D’s delivery service and Superablist, an online fashion retailer under the local umbrella.

Read: Takealot, UberEats, Google and more have come under fire in South Africa’s online market survey – here are all the key takeaways