Amazon.com forges ahead despite Comp Comm's requirements

The latest Takealot Competition Commission ruling seems unlikely to affect Amazon's long-term African expansion plans, and the market shouldn't underestimate the retail giant's ability to push back against requirements it deems unreasonable.

The Competition Commission's (Comp Comm) Online Intermediation Platforms Market Inquiry's remedial requirements for Takealot have ruffled more than a few feathers in the retail space, but not e-commerce juggernaut, Amazon.com, which is forging ahead with its plans to enter the local market, albeit at a more leisurely pace.

“The building of warehouses and local hiring is ongoing, but the urgency is certainly no longer there,” comments Anouck van Rietschoten, head of operations (marketplaces) at Incubeta.

“These new remedial actions by the Competition Commission are also going to demand the full attention of the Amazon legal team and, even though they will definitely be on top of it, the company seems to be dealing with more hurdles than are immediately apparent,” she adds.

Van Rietschoten also says that South Africa’s greylisting would have also added complexity to the global marketplace’s expansion plans and says that while the Nasdaq heavyweight certainly has the resources to deal with the challenges, the postponement of its planned 2023 launch is very likely.

“If we see a Q1 2024 launch it would likely be a soft launch with some select big brands and most likely without the third-party (3P) model. What we have seen in other regions is that Amazon will onboard big brands, focussing on its first-party or 1P model.

“While they have historically opened their seller side at the time of launch, they have opened it to just a few select 3P sellers and have not actively recruited resellers. This allows them to get the platform going and the customers used the service before they begin with a vendor onboarding drive,” she explains.