EDITORIAL: Goliath — with a fleet of drones

The entry of Amazon is less a gentle ripple and more a seismic wave, poised to test the resilience of local retailers in the cut-throat arena of SA e-commerce. It’s a David vs Goliath scenario, but this time Goliath has a fleet of drones.

Here we have Takealot, our home-grown e-commerce hopeful, burning through cash to climb the retail ladder, and along comes the world’s biggest retailer with its deep pockets and global clout.

It would be comical, if the stakes weren’t so high, watching the Competition Commission, a trade & industry antitrust watchdog, scrambling to put policies together against Takealot under the guise of promoting fair competition as if it were the Goliath in this tale. It’s akin to tightening the rules against a high school team and expecting them to hold their own against Patrice Motsepe-backed Premier Soccer League champions Mamelodi Sundowns.

Sure, SA business leaders have talent. Look no further than Discovery, the behavioural business model of which has redrawn the insurance pricing landscape and attracted partnerships as far afield as China. But does Takealot have the resources, the infrastructure and the scale of Amazon to compete?

The arrival of Amazon, whose R37-trillion market value equals about than two-thirds of the yearly GDP of the whole African continent, must be a wake-up call for policymakers and Doris Tshepe, who heads the commission. The focus should not be on restraining Takealot, a tiny player in the broader R1.3-trillion retail market dominated by brick-and-mortar outlets like Shoprite, but rather on fortifying it against an international titan. Amazon’s launch is a golden opportunity to recalibrate our regulatory approach and reflect the reality of the marketplace.

Founded in 2011 and owned by Naspers, Takealot — made up of takealot.com, fashion outfit Superbalist and food delivery platform Mr D Food — has the potential to be an SA e-commerce champion, a beacon of local success. But it requires a regulatory environment that acknowledges the heft of international players like Amazon. Tshepe, at the helm since 2020, and her colleagues in the government must balance the scales, not tip them, ensuring that Takealot and other local players don't just survive but thrive among global giants.

Amazon’s entry isn’t just a test for Takealot; it’s a full-blown examination of the resilience of everyone in the market, from Shoprite to Spar and Massmart to Woolworths. With some of the fattest margins in the world, Shoprite has a fighting chance and one would have thought it would be enough to teach Amazon a thing or two about playing in the SA market just as it did Walmart — whose entry into the continent has been nothing short of a disaster. For other retailers, some of which are ailing, barely making a 1% profit margin, the question is: as Amazon unfurls its offerings, how will they adapt? Will they be able to match the convenience, the pricing and the sheer scale of services that Amazon brings?

These are not trivial questions. They go the heart of running a business in a changing marketplace, the ability to understand the unique needs of the SA consumer and to offer them something even a global giant cannot replicate.

Only time will tell, but one thing is certain: the retail game has changed, and all eyes are on how SA will play its hand.