Business
How Takealot’s Buy Box changes are hurting South African small businesses
For many South African entrepreneurs, Takealot is not just another website. It is their storefront, their warehouse shelf, and in some cases, their only lifeline to customers across the country.
But behind the convenience of one-click shopping, a quiet storm has been brewing. And at the centre of it all is the Takealot Buy Box.
A marketplace under pressure
Over the past few months, local merchants trading on Takealot Marketplace have noticed something unsettling. A surge of sellers operating from China appears to be flooding the platform, offering goods at rock-bottom prices and delivery times stretching well beyond what South African sellers are typically allowed.
Some merchants claim they have seen listings with delivery estimates of 20 days or more. By contrast, local sellers say they are tightly bound to three- to five-day lead times and penalised if they miss them.
There are also allegations that certain overseas sellers are using local intermediaries, rotating bank accounts, and structuring operations in ways that avoid triggering VAT thresholds. Some local merchants even report seeing Mandarin adverts promoting turnkey solutions for Chinese sellers looking to join Takealot, including assistance with account creation and local banking.
Takealot, however, maintains that all sellers, regardless of where they are based, are subject to the same regulatory, tax, and governance requirements on the platform.
The 2023 ruling that changed everything
The roots of this tension trace back to a 2023 decision by the Competition Commission following its online marketplaces inquiry.
The Commission scrutinised the way Takealot’s Buy Box works. For shoppers who do not know, the Buy Box is the default seller option highlighted when multiple vendors list the same product. It is not a minor feature. According to the Commission’s report, more than 90 percent of shoppers choose the option presented in the Buy Box.
At the time, the Commission found that the Buy Box algorithm favoured the fastest delivery time. Because Takealot’s own retail stock is typically housed in its warehouse, this design often benefited Takealot Retail over independent marketplace sellers.
The regulator argued that it could not be assumed that consumers always prefer the fastest option over the cheapest. As a result, Takealot was instructed to re-engineer the Buy Box so that it would reflect both the cheapest and the fastest offer, rather than prioritising speed alone.
On paper, it sounded like a move aimed at fairness.
In practice, some local merchants say it has opened the door to unintended consequences.
The price war problem
When price becomes a decisive factor in winning the Buy Box, even a difference of one rand can tip the scales.
Local sellers argue that overseas merchants, particularly those shipping directly from China, can afford to undercut them by small margins while offering much longer delivery times. Because the cheapest option can now be surfaced prominently in the Buy Box, these listings can become the default choice for shoppers.
From a consumer perspective, the logic is simple. If the price is lower and the difference seems marginal, many will click the highlighted option without scrutinising delivery timelines.
For small South African businesses operating on tight margins, that one click can mean the difference between staying afloat and shutting down.
Takealot’s response
Takealot has defended its approach, noting that cross-border commerce is now standard in modern e-commerce. Globally, major platforms combine local sellers with international supply to expand choice and keep prices competitive.
The company says it is responsibly piloting international sourcing channels while protecting the integrity of its local ecosystem. It has also emphasised that expanding sourcing capabilities can create opportunities for South African sellers, including access to new supply channels and logistics infrastructure to help them scale.
In its view, this evolution reflects global best practice rather than a departure from supporting local entrepreneurs.
A bigger question for South Africa
This debate is not just about algorithms or delivery times. It taps into a broader anxiety in South Africa’s retail economy.
Local SMEs already face high operating costs, electricity instability, logistics challenges, and tax compliance pressures. Competing directly with overseas factories that ship at scale is a different level of challenge entirely.
The Competition Commission sought to promote fairness and prevent dominance by a single player. Yet some merchants now feel the pendulum has swung in a direction that leaves them exposed.
The Commission did not provide a comment at the time of publication.
For now, the Takealot Buy Box remains a powerful gatekeeper in South African online retail. And as shoppers continue to click that default option more than 90 percent of the time, the stakes for small businesses could not be higher.
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Source: MyBroadband
Featured Image: Daily Investor
