E-COMMERCE
Gloves come off as SA’s Takealot and Zando tackle global juggernauts Temu, Shein and Amazon
South Africa’s e-commerce industry might be spooked by the likes of Temu, Shein and Amazon, but it’s not giving up turf without a fight.
South Africa’s online retailers are already smarting from the entry of international offshore retailers Temu and Shein. It’s likely to get even worse, once the US juggernaut Amazon finally unboxes in the country, which could heap further pressure on SMEs and manufacturers.
Leading e-commerce group Takealot, which incorporates the Takealot.com, Mr D and Superbalist platforms, has admitted that it is under immense pressure from the global players, which is why programmes such as its Township Economy Initiative, a R150-million partnership between Takealot and the Gauteng government, are so vital to drive local business. The initiative has been developed over the past year and was launched last week.
Takealot Group CEO Mamongae Mahlare said they had witnessed a sharp rise in the cost of digital advertising in recent months, which lumped inflationary pressure on to existing players like Takealot.
“The biggest thing we have noticed is how it’s impacting the digital cost of acquisition of advertising. I don’t think there’s a single person who’s opened up YouTube in the past two months that has not been fed tons and tons of Temu adverts.
“What that does is that it increases the cost of digital customer engagement by over 200%, which not only affects digital marketing costs, but also affects small businesses and local entrepreneurs trading on our platforms who also need to be participating in the market. For us, it is also more costly.”
Last week, at the announcement of the township initiative, Takealot.com CEO Frederik Zietsman told News24 that they had seen a significant inflationary fallout, with Temu’s arrival, in particular, resulting in a doubling of costs since the start of the year.
“And that not only impacts Takealot, it impacts all the small businesses that try to transact online because the cost of acquisition is going up. So, there’s inflationary pressure from these new entrants.”
Zietsman, however, said they were confident that Takealot could hold its own against these new competitors by focusing on giving its customers what they wanted and serving them better. He believed the new competition was good for e-commerce as online retailing was still nascent in SA.
Through the new compact, Takealot wants to help drive entrepreneurship in underserved areas of the country to provide opportunities for residents of these areas to work, sell their products, and create jobs and economic growth.
It is hoped around 20,000 jobs will be created through the programme, which is being rolled out in Gauteng.
Mahlare told Daily Maverick the programme was starting up north, but the intention was “most definitely” to make it a national project.
Consisting of six schemes, the Takealot Township Economy Initiative will focus on creating jobs and supporting small businesses owned by black people in underserved communities across South Africa.
The initiative will include programmes for personal shoppers, delivery team driver development and township franchise development; it will help to get black-owned restaurants in townships off the ground, and stock Superbalist resellers.
On Thursday, 18 April, Reuters reported that online fashion retailer Zando had launched an international e-commerce division, Zando Global, to take on fast-fashion Chinese retailers Shein and Temu in South Africa.
Zando said that Zando Global would “step in as the local hero” to offer a trustworthy alternative for those who want international products — without the uncertainties (especially around quality issues, delivery reliability and the returns process) that accompany ordering from abroad.
The report said Zando would ensure that South African shoppers can easily receive, collect and return products, offering hassle-free shopping with local operations.
Zando will use the same delivery partner as Temu and Shein, Buffalo International Logistics, with free shipping for parcels worth more than R550.
For now, Takealot’s websites are in a strong lead. Semrush’s latest data show that it enjoyed almost 21 million visits in March, followed by its closest rival, Makro, at just more than 4.9 million. Shein, in sixth place, had just more than 3.5 million visits that month and Temu was not even in the top 20. That divide is likely to narrow materially, and soon. DM
I use Amazon frequently and when I visit my parents in SA I have used Takealot. The differences between the two are huge. The 2 main things I noticed was how limited the choices are when you search for a product(and often brands I had never heard of) and I thought the search engine was pretty poor as it would often come up with options I was not looking for. I would have included ease of delivery too, but with the security constraints SA will never be able to just leave packages at the door without signing. If Amazon eventually offers a similar service in SA to what we have in the US I cannot see a way that Takealot will survive in the long run.
Read about Paradox of Choice by Barry Schwartz, or listen to his Ted talk: a wide choice is not the be all and end all, nor is it a route to happiness. Quite the opposite.
The utter overdose of choice on Amazon et al is indeed a problem. A far smaller variety, but with greater quality of good supplied, would be (to me at least) preferable.
The trouble with Amazon (and Shein and Temu) is that the race to the bottom on price is the strongest driver. People somehow seem to be happy to buy a cheap t-shirt five times, rather than a good quality one once. And end up paying more over the same period.
Yes, a flawed example, but the illustration broadly holds.
Having used both Amazon and Takealot extensively, it’s not even close. It’s like saying you prefer having a Kwik-Spar to having a Walmart.
Takealot is not a paragon of high quality products, and while Amazon has problems with low quality items too, you can almost always find what you are looking for. Quite the opposite with Takealot I’m afraid.
Finally, Amazon’s customer support is light years ahead of Takealot. I sometimes joke that Takealot’s business model is ‘what if we copied everything about Amazon except the customer service?’
I am no Amazon/Bezos fanboy, it is just clear in the comments who has used Amazon and who hasn’t.
People become addicted to choice and, being driven by AI that enhances endorphins. I have UK/US friends, who I thought smart, that cannot stop themselves buying! While it’s a worry for SA retailers being driven to sharpen margins, initiatives like the Town Economy Initiative is a very good, proactive, attempt to head off direct completion with a POD that will resonate with the SA majority. It’s also encouraging to see a Govt dept involved, who’d have thought, a strategy to benefit the community they serve! Things are looking up!
On the contrary, with Amazon you have the choice of high-end expensive products or cheap and nasty low-end stuff and you decide for yourself what you want. As with shopping for anything, you do your research and buy what you want be it based on quality or price and the majority of the time you’ll get it for a far better price on Amazon, for example, there is a particular brand and model of golf shoe that I like, I checked out the correct size by fitting them at a local store, did my homework and got them for less than half the price through Amazon (and no, they were not knockoffs).
Used Amazon once, to order a book that isn’t available in SA. After 3 months of the book apparently being in the Amazon warehouse in New York, they refunded me. 6 months after that, I got a notice from my local post office (yeah, I know, an actual notice!) that I assumed was a traffic fine (cough). Turned out to be my book, which had arrived in SA 7 months after the initial order, with the local leg from Post Office to me taking another 2 months. What I will say for Amazon was that their response times to my queries were excellent and they paid me back without a fuss.
Never had an issue with Takealot or most e-commerce locally, except for that flower place with the old, tatty, irritating radio ads. Last ordered from them over a decade ago.*
* Absolutely no coincidence that I got married just over a decade ago.
Yes, Takealot’s search function is so bad it verges on useless, with the item you are actually looking for drowned by irrelevant junk you didn’t ask for. Despite a torrent of complaints, Takealot aren’t doing anything about it. I’ll certainly be looking at going elsewhere when the competition arrives.
No competition = no need to innovate or worry about customer satisfaction. Just look at how awful Multichoice is
Personally, I am not a fan of Amazon’s, what with their warehouse practices and what not, and I dislike Jeff Besos – but that is subjective. That said, Takealot is really expensive, and their choice is risible. I also regularly land on something that has not even vaguely been included in my search. Books and music are particularly badly represented on Takealot, so I can’t wait to see how the arrival of Amazon in SA might change that for the better. If Takealot stocked the same stuff as Amazon, I’d support the prior.
None
it is going to be very interesting who gets the lion’ share of the e-market.
Takealot and Amazon are selling platforms whereas temu and Shein sell directly to the members of public at low low prices. Some of its stuff is good but most is low end throw away products.
Let’s wait and see who does better as a company but one thing is sure that people are going to have a huge choice and low prices.
Tax these companies or add tariffs in lieu of tax.
Hahahaha – and screw the end user, the man on the street even more???
The man on the street can easily purchase comparative products from local companies and make an active contribution to growing our SME sector, boosting employment, drive up tax revenue and generally play a part in a ‘rising tide’ of sorts where we all benefit. Buying from these industrial-scale grifters and mercenary IP thieves does nothing for anyone but the companies exploiting our market.
You grossly overestimate what is actually manufactured in SA
So who would start a manufacturing business in SA? Not a welcoming environment.
Tax these companies or add tariffs in lieu of tax.
Duties are already added.
How does this mak sense if Zando is using the exact same delivery partner (Buffalo International Logistics) My Shein parcel took 5 days to get from China to SA and once it was in SA it took more than a month before I requested a refund because the parcel had still not arrived. If I was Zando I would rethink that partnership.
“Zando said that Zando Global would “step in as the local hero” to offer a trustworthy alternative for those who want international products — without the uncertainties (especially around quality issues, delivery reliability and the returns process) that accompany ordering from abroad.”
Good point – have just requested refund on first Temu order as Buffalo International Logistics are beyond useless and my package “may be lost” after three “misrouts” – this in spite of emails to Buffalo with detailed delivery instructions to which I never had any response. Good luck to Zando in their “local hero” efforts if they’ve partnered with Buffalo.
The competitive edge may come from a sustainability angle, Takealot is creating local jobs, which I think can go a long way to changing SA consumers minds to support the local company instead. This would probably require consumer education and other perks – a subscription model that offers discounts perhaps. Reality though, when faced with two products that perform the same function, but the cost of one is a small fraction, struggling SA consumers actually only have one choice then.
Will Amazon also be required to Pass the BBBBBEEEEEE requirements like Starlink?
What most people seem to have missed here is that these global giants are not good for the SA economy. They don’t support local jobs nor pay local taxes. The likes of Temu have billions of dollars of ad spend behind them, which a local company will never be able to compete with. Takealot should keep pushing that they are good for the local economy. I won’t buy from a huge Chinese corporation if I have even a fraction of the choice with a local site. Time to support SA companies and our own economy!!
Spot on, at every level! Global e-commerce platforms offer very little to SA as a country. I know it’s about consumer choice etc, but I try very hard to support local products wherever possible – from food, to clothing, to cars, to pretty much everything that I have a choice over. There will be those that take the view that companies need to sink or swim in the global order, but zero protection for local industries is as bad as complete protection – under the former, there will almost always be a producer somewhere in the world that can provide a product cheaper than we can here, which would ultimately kill our economy, whilst under the latter, unscrupulous producers simply milk the system for maximum profits.
I’d love to see the correct balance being achieved between local production and imports, but local producers don’t just have to contend with ‘normal’ market forces, they’re fighting against crime, corruption and collapsing infrastructure at the same time. Ultimately, fix those and we’ve got a fighting chance.
With 45% import duty on anything deemed a “luxury item” (with 15% VAT charged on the item + shipping + import duty) I think we have way too much protection in place already. Many things simply aren’t produced in SA and we have what amounts to highway robbery tax slapped on them if we try to import. Not to mention the slowness and incompetence of Customs. Computer hardware for your business? Luxury item. Medical supplies? Luxury item. It’s a joke.
Apart from food (well most of it, not all) what else from your list do you think is manufactured in SA? Clothing – 99% comes from the far east, cars – part from being assembled here not much if anything is actually manufactured here, ell we barely manufacture steel anymore, the ore is exported and we import the finished product.
Our manufacturing sector is all but dead so buying SA made products only is not that easy or straightforward
Be South African! Buy South African!
Why?
No, you’re wrong. You’re staring at the magician’s hands instead of the “trick”. What everybody is missing is that Takealot in the first instance simply copied the Amazon model of putting every little street-corner family out business by bringing in cheap Chinese stuff and distributing it without putting up retail stores and employing cashiers. More than 50% of what they sell is for their own book, and 90% of that it comes form China; the rest is from small wholesalers and retailers who simply import themselves and post on Takealot (quite transparently), but have distribution rights (Yuppiechef, etc). Take a drive through what used to be industrial areas in SA and what do you see? Warehouses: massive Distribution Centres. Factoreis are long gone – and so have the jobs. Ironically Takealot also impacted the large established retailers like Mr Price and Fochinis and the rest, who also import most of their product but are bound with high costs in rentals and labour in retail outlets. So the likes of Shein and Temu are nothing but a natural progression, cutting out the middleman (Takealot et al) and bringing those chintzy, cheap Chinese products directly to the consumer. For shame, but that is the way SA is going – same as how we’re supporting job creation in China on solar panels, etc. Our unions demand a globally uncompetitive wage which makes us uncompetitive as a job-creating entity vs our BRICS mates – forced Uighur labour & all. THAT is what everyone is missing.
Yup, spot on there Boet
You do know that Amazon will open facilities in SA and provide jobs to many South Africans, they also provide a selling platform for local products/suppliers/businesses or are you just anti Amazon for daring to enter the SA space?
If Amazon copy-pastes their labour practices from the US they’ll run into an endless stream of union action. And Amazon as a “selling platform”? More like a showcase of IP theft.
Amazon in particular is a parasitic organisation that has made it its vision to destroy small businesses and local craftspeople through price wars, IP theft and general shithousery. I would not support them outside of extremely rare cases where there is literally no other option than to purchase an essential item from them (which is highly unlikely)
Shein and Temu are similar, but their products are almost universally awful quality and aside from novelty value offer little to a discerning shopper.
If cheap crap is what you’re looking for, by all means go with the Chinese options. And if you like your brands ‘mercenary’, support Amazon. But if you have any desire to help grow the South African economy, rather spend your spare rands at a smaller shop – or even better, buy direct from the creators!
Welcome to the 21st century
I don’t know anything about Zando and haven’t exposed myself to Shein or Temu.
Amazon is great for Video and Kindle, Takealot credible too.
I have ordered twice from Temu and have been surprised at how quickly my orders arrived. Product quality however is hit and miss. I haven’t yet tried their returns process but they do appear to be concerned if you give any product less than a 5 star rating.
I understand the need to support local businesses but I don’t think that Takealot have been fair to us as consumers by hiking their prices up. It started off as a site where you could get good bargains but I am finding lately that I can buy some of the same products cheaper at shops.
With disposable income under pressure it is hard to resist the lure of Temu with fun products at very low prices.
Brilliant article on current events. Thanks
BOT
Takealot has become very arrogant and user unfriendly recently! After 13 years as a loyal client I am done with them and no, they don’t care!! My inclination has always been to support local companies but the loyalty is not returned. I think a bit of international competition will shake things up and that is good for the consumer.
I big ticket items exclusively on Amazon and my experience has been absolutely stellar. Each member of the family has a highish end HP laptop bought on Amazon for substantially less than the equivalent was available from any SA retailer even on those loathsome black friday promotions. The one that took the longest to arrive got here in 6 working days. I forgot to add a mouse and keyboard to the order so decided to hit up Takealot the morning after the Amazon order. The orders arrived on the same day in spite of the fact that both items reflected as being in stock.
I strongly dislike the whole business model: the cheapness of Shein and Temu (and, really, Amazon) is only made possible by a tremendously high social cost and environmental cost.
I find it tremendously ironic that Gen Zs, who talk big about social justice and environmental justice have no problem with supporting slave labour the moment they may have to sacrifice a little bit of personl comfort.
I’ll happily pay a couple of bucks extra and support a local company and local producers and help to put food on the table of a local family, instead of helping Jeff Bezos buy another yacht.
Proudly South African!
Amazon warehouses in the UK report much higher levels of injuries because of the inhuman work conditions. When things are cheap it’s usually because of low wages paid to the desperate – should we be applauding that? For example: notice what bike delivery guys are wearing. No proper bike boots or jackets, and probably the helmets are the cheapest available.
Yes, absolutely. And the helmet chin straps are never tied. Good as useless if they come off.
Good point. I also noticed.
Needed a replacement strap for watch. Product made in China, no local production. Resold on Takelot by businesses owned by foreigners.
R180 from takelot + R60 shipping.
Thought I’d check it out on Temu, same product R17. Free shipping. However minimum order is R200. Bought 6 in different colours and threw in a wifi camera, total R260 including Duties and VAT.
Ultimately it’s simple math. I think the tax man made more money from the Temu purchase than if I had purchased from Takelot with that ridiculous markup which was not to my benefit nor to our country’s.
It is sad that there are many people who comment on something without taking time to experience it. I have bought a lot of items on Temu, Shein,Amazon, Takealot, Makro and Ebay. As much as Shein and Tenu are bargain sites they offer both high quality and poor quality items as with the rest of the major e-commerce platforms. You just need to know what you want. The winning platform has been the one that refined the delivery and returns process. Ebay used to do well when the post office knew what they were doing. So variety, customer care, price and logistics in a delicate balance are going to determine the winner.
I am a book nut, and the ease of buying books on Amazon is negated by the delivery costs (Hooray for living all the way down South away from everywhere else).
So I can’t wait for Amazon to open in South Africa and hopefully the delivery costs will drop substantially.
Impossible is nothing
I’ll wait for news
Thank you
The only feature I absolutely enjoy about Amazon is browsing second hand books on their platform. If Takealot introduced an option like this for books they sell, they’d win me over.
I’m delighted that Amazon are moving into the SA market. Takealot’s customer care is shoddy, arrogant and unresponsive. While it’s sad that a SA company will be the loser, maybe they will see it as an opportunity to fix the chronic problems that plague them.
I like to read things that is existing for me.
a BOT that can’t spell… hahahaha
I buy from SA companies only, local is lekker
We do very little in the way of manufacturing anymore so it’s reasonable to assume that the bulk of what you buy wasn’t made here.
You obviously don’t buy much then especially as our manufacturing sector is next to zero these days
A lot of Takealot bashing going on here! As a customer I think Takealot provides a good local service. However, as a small business owner I am also a supplier of products to both Amazon UK and Takelot in SA and have been for years. Amazon UK has the most unwieldy clunky systems, while Takealot has a slick, efficient system supply chain. Takealot answers my emails and phone calls. Amazon UK suspends my products, does not inform me and then replies to my emails /online forms with standard AI-type nonsense. When Amazon come to SA as I supplier I will stick with Takealot. Far superior.
Takelot is becomming extremely expensive. Best is, companies like Shein can diliver exactly the same product to your home in seven days at a fraction of the cost.
South Africans are falling for all these estores and they get so spooked. The quality presented is not the same as advertised. Im one of those. The thing is we want the best and yet the best seem to be available for South Africans. We are sold a picture that is totally wrong sizewize quality and all. What u see its not what u get.