Amazon.co.za and Takalot.com are ramping up efforts to better compete against Chinese online retailers and traditional brick-and-mortar giants that are accelerating their omni-channel strategies.
This was the word from Gareth Paterson, director of client strategy at research firm NielsenIQand GfK, speaking at E-commerce Live, held on 12 September, in Johannesburg.
Delivering a presentation, Paterson noted howonline shopping competition is becoming particularly heated in the marketplace arena, with players such as Takealot, Amazon and Makro positioning advertising and commissions from third-party sellers on their websites as a major engine of growth.
Over the last few years, new online retailers, such as Temu, Shein and Wish, have entered the market, shaking up the local landscape with low-cost products manufactured in China, as well as free shipping.
According to Paterson, the marketplace offering is a key part of Amazon’s proposition for South Africa, and the retail giant is accelerating its fulfilment strategy to create ways for local sellers on its platform to be able to seamlessly offer goods from China.
Meanwhile, leading South African retailers are closely looking at how digital platforms − such as e-commerce marketplaces, super apps and social commerce − can form part of an omni-channel strategy to reach consumers wherever they are.
“The marketplace is going to be one of Amazon's main generators of revenue. Amazon is bringing in the big guns on how to win in this space. They are having discussions around how to correctly bring things from China to compete, amid the rising competition in SA.
“We've seen offline moving into online and online evolving. Shoppers are looking for the right online experience; they're looking for a wide variety of products at the right price. With Amazon coming into this space, it's absolutely key for retailers and marketplace sellers to have a good strategy in place.”
Paterson highlighted some of the strategies e-commerce giants Takealot and Amazon.co.za have introduced in recent months, to better fend off competitors.
Retail giant Amazon officially launched Amazon.co.za in May, promising to provide customers in SA with a new online shopping experience.
The e-tailer’s sellers now also offer deliveries of international and local products, with access to over 3 000 pickup points and 24/7 customer support.
SA’s biggest e-tailer, Takealot, has introduced TakealotMORE, a subscription service offering customers exclusive benefits, including unlimited deliveries, he added.
Takealot has grown to support over 12 000 small businesses through its Takealot Marketplace platform, and has expanded its nationwide delivery and collection hubs to over 100 pickup points. It is now in the process of introducing Takealot dark stores, or mini warehouses, across SA.
Paterson provided insights from NielsenIQ, showing consumers worldwide spent $3.25 trillion on the top 100 marketplaces in 2022. Around two-thirds of global e-commerce sales take place on online marketplaces. Similar trends can be seen in SA, where competition has accelerated following Amazon’s launch in the market, noted Paterson.
Those that can consistently reach customers at the right place and time will be able to gain a competitive advantage and accelerate their growth, he said.
“With consumers still under pressure following years of slow economic growth, load-shedding and high interest rates, each retailer and manufacturer should be looking at how to optimise its omni-channel strategy.
“There are more routes to reach the consumer than ever before, but also more competition. This makes it more essential than ever to understand where customers are, how they make their purchasing decisions, and the costs and opportunities of each channel.”
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