By Thys Khiba – Founded in 2011 and owned by Naspers, South Africa’s largest online retailer Takealot expressed their frustration and disappointment on the outcome of the Competition Commission investigation into the e-commerce market, which instructs the company to split its marketplace and retail businesses.
“While we are supportive of the Competition Commission’s work around the market inquiry to protect [small, medium and micro enterprises] and consumers, we are disappointed with some of the commission’s findings in the final report which are incorrectly premised on the notion that Takealot and Mr D are ‘leading platforms,’ when they compete in dynamic markets with much larger competitors in which consumers have considerable choice.
“For instance, takealot.com naturally competes with other, much larger brick-and-mortar retailers who have a sizeable and growing presence online but are excluded from complying with these requirements,” said Takealot in a statement.
This comes after the commission announced this week that the separation is necessary to stop Takealot from favouring its own products over those of third-party sellers and to create a level playing field for small and black-owned businesses.
The announcement follows an indication by the commission that it has launched an inquiry into the digital economy in May 2021.
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Inquiry chair and economist James Hodge said splitting the businesses would remove a ‘conflict of interest’ presented by its hybrid platform model.
The inquiry is used to promote fair competition online and ensure small and black businesses can take part in the digital economy.
Currently, Takealot is made up of takealot.com, fashion outfit Superbalist and food delivery business Mr D Food – is the largest e-commerce business in SA.
It has been reported it accounts for about 2% of the overall retail market, which is dominated by brick-and-mortar outlets such as Shoprite and Mr Price.
The company argued that the same reality applies to their food delivery Mr D, which is a very small contributor to any restaurant’s revenues.
They have been instructed to hire separate senior management teams to oversee the divisions and to stop promoting its own products above those of third-party sellers.
Meanwhile, the company can no longer enforce the rule that suppliers cannot sell goods at a lower price on their own websites.
The commission viewed Takealot as a beneficial marketplacethat can do more to support black businesses joining the site by offering expertise and discounts.
Meanwhile, the report did not impose any measures on other online retailers that have physical stores, such as Checkers, TFG and Makro, or on foreign competitors such as Google, Booking.com, Shein and Apple, which the commission had initially targeted but later softened its stance on.
Takealot and other affected parties are given 20 days to challenge the report’s recommendations at the Competition Tribunal.
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