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