Tags: Online | Retail | South Africa

Online Retail Gets a Boost in South Africa

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Tuesday, 06 Jan 2015 10:10 AM Current | Bio | Archive

South Africa has long shown a great potential for local online shopping business. However due to the high cost of internet usage and a highly competitive market coming up against the likes of Amazon and Alibaba, success in this field has been somewhat stunted.

Two of the largest 'etailers' in South Africa, Takealot.com and Kalahari.com have had to endure years of losses in an attempt to become competitive on an uneven playing field. Foreign competitors have the advantage of scale as well as not being required to pay tax in South Africa.

The upside for these two local competitors is that there is ample room for growth in this industry to allow for a strategic offensive in the hopes of a comeback. Currently online retail makes up only 1.3 percent of goods sold, compared to the 14 percent in the U.S.

The two competitors have decided that if they are to turn the tide in their favor they will need to work together. In a proposition approved on Monday by the Competition Commission of South Africa, Kalahari.com and takealot.com have entered into a merger.

The combination of operations will allow for greater efficiencies, more variety for the customer, and of course, the much needed scale to become competitive against even the most formidable opponent.

Matthew Klynsmith earned a business administration diploma at CTI in Cape Town, South Africa. He now works at Strategic Options as an associate partner. To read more reports from Matthew Klynsmith, Go Here Now.
 

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In a proposition approved on Monday by the Competition Commission of South Africa, Kalahari.com and takealot.com have entered into a merger.
Online, Retail, South Africa
248
2015-10-06
Tuesday, 06 Jan 2015 10:10 AM
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