Press release: SBI urges Competition Commission to act with caution around online marketplace ‘dominance’

The Small Business Institute (SBI) notes that Competition Commissioner Tembinkosi Bonakele, speaking at a conference this week, confirmed that Takealot will be a target for proactive abuse of dominance investigations.

While the SBI is fully supportive of regulations and sanctions against the potential harm such abuse can cause to competitors and smaller players in downstream markets, we would suggest there may be other priorities to ‘enable a more competitive digital economy,’ such as extending the footprint and lowering costs for broadband; enhancing computer skills training and investing in national research and development.

Further, in the wake of lockdown and an earlier, economically destructive decision by government to forbid most ecommerce and online sales, the timing of this suggestion could not be worse.

The United Nations Africa Marketplace Explorer (which identifies Gumtree as larger than Takealot), identifies dominant players, but also suggests they face considerable competition. Their research confirms that the world’s largest marketplaces do not have a strong presence in Africa, which open up opportunities for local marketplaces. South Africa already has over 100 online marketplaces, more than any other country on the continent. Most sites are classifieds; relatively few are transactional, but 80% are domestic players. In 2019, Takealot received 114 million visitors, or 17.5% of the 650 million visitors to South African online marketplaces.

“Online marketplaces represent a real opportunity for SMMEs to trade,” said SBI CEO John Dludlu. “They also make it easy by handling payments and logistics and removing the requirement for a small business without the right skills or infrastructure to set up their own websites and distribution channels, let alone to access a wider – even regional or international – market.”

On the cusp of the world’s fourth industrial revolution, South Africa risks being a no-show, not just a late comer, if we do not prioritise a course of action to enable businesses to leap into the future. As a recent business owner wrote in a local newspaper: “Government’s job, in respect of business, should be to get out of the way.”

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