Takealot Bets on Townships to Compete with Global Giants Like Amazon, Temu & Shein

Takealot, South Africa’s largest e-commerce platform, is shifting its strategy to expand into townships and rural areas, aiming to fend off mounting competition from global players like Amazon, Temu, and Shein. The company has hired thousands of personal shoppers to cater to non-tech-savvy consumers and plans to grow its network further in the coming years.

Takealot, owned by tech giant Naspers, has seen significant pressure from international rivals that have entered the South African market. Amazon launched operations in the country in May, and Temu and Shein followed suit shortly after, making a substantial impact on local retail dynamics.

Frederik Zietsman, Takealot Group’s CEO, explained the shift:

“You can’t argue that they had an impact on the overall retail environment… the cost of doing business has gone up significantly.”

Despite this, Zietsman remains optimistic about the growth potential in South Africa’s e-commerce market, which has gained global attention due to the country’s higher mobile internet usage, smartphone penetration, and new payment methods such as Buy Now, Pay Later.

Expansion into Townships and Rural Areas

In an effort to reach the more price-conscious and less tech-savvy consumers in townships and rural areas, Takealot has launched an initiative to recruit personal shoppers. These shoppers help customers unfamiliar with digital platforms make online purchases. The service targets areas where traditional e-commerce struggles to gain a foothold.

So far, Takealot has hired around 2,500 personal shoppers and plans to expand to 5,000 by 2028. According to Zietsman, this initiative is key to unlocking new markets in South Africa, as townships represent a largely untapped consumer base.

“The personal shopper brings more drivers, the more drivers there are, the more need you’ve got for a franchisee and then you establish the franchisee, then you create the ecosystem,” Zietsman explained.

The initiative has already yielded positive results, with personal shoppers like Achumile Vellem buying products ranging from air fryers to cell phones for customers in rural areas like Keiskammerhoek in the Eastern Cape.

Investing in “Dark Stores” and Automation

To support its growing operations and enhance efficiency, Takealot is also investing in “dark stores”, specialized facilities dedicated solely to fulfilling online orders. The company plans to expand these stores within the next 12 months, capitalizing on their ability to speed up order fulfillment and provide better customer service.

Currently, Takealot has four dark stores located near major distribution centers, including its Johannesburg facility, which has recently seen a R19 million ($1 million) investment in robotic technology to process larger items more efficiently. In Cape Town, increased automation at the facility allows Takealot to handle more parcels daily.

Zietsman highlighted how these technological investments are vital to scaling operations quickly and meeting increasing demand from both urban and rural customers.

“The robots help us scale quicker in that they can sort faster… they can take a lot of incremental load within the physical facility,” he said.

Takealot’s expansion into South Africa’s townships and rural areas represents a strategic move to counter the growing influence of international e-commerce giants like Amazon, Temu, and Shein. With an increased focus on personalized shopping services, automated operations, and dark stores, Takealot is positioning itself to stay competitive and tap into new markets.

As e-commerce continues to boom in South Africa, the company’s emphasis on innovation and customer engagement could help it reclaim market share and foster long-term growth.

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