The Rise of South African Marketplaces
And Amazon’s Anticipated Launch
We explore the rise of leading South African online Marketplaces, like BidorBuy, Takealot and Leroy Merlin. Amazon plans to launch in South Africa in 2023, which raises several debates around development, small business impact, and competition.
Spoilers: Everything will be okay, but we didn’t forget to include some top tips for South African eRetailers.
The Rise of BidorBuy
BidorBuy, founded by Andy Higgins and Talana Simpson, started in humble beginnings during the dotcom bubble in 1999. BidorBuy’s concept is simple: an online auction and marketplace where sellers and consumers can interact and buy products.
BidorBuy’s footprint in South Africa happened through innovation and iteration. In 2001, BidorBuy was the leading eCommerce marketplace in South Africa, eventually opening in Australia and India.
However, the dotcom bubble burst, resulting in the Australian branch closing and the Indian branch (formerly known as Baazee.com) being acquired by what is now eBay. Higgins returned to South Africa and inn 2005, the emergence of broadband restored BidorBuy, making it the biggest eCommerce marketplace in South Africa and Africa.
This was not the first time Technology worked in BidorBuy’s favour, when, in 2009 they launched bobPay, an EFT payment service that prevents time delays and eases transfers between banks. This caught the attention of Naspers Kalahari.net. The intention was to purchase BidorBuy, but that deal was never agreed upon.
At the time Higgins predicted that Naspers would launch a marketplace like Amazon.com, which indeed happened through Takealot many years later.
Rudolph Muller, 2021
Despite these challenges, BidorBuy continued to strengthen, even as a direct competitor with Naspers OLX. In 2019, Craig Lubbe took the helm of BidorBuy as CEO, with Higgins still a major shareholder. The result?
Bidorbuy has survived many ups and downs and is now one of the most recognisable ecommerce names in South Africa with swanky offices in Bryanston.
Rudolph Muller, 2021
The Rise of Takealot.com
Known as the largest, most innovative eCommerce marketplace in Africa, Takealot launched in 2011 after the acquisition of eCommerce company Take2. Takealot’s incredible customer-centric vision resulted in warehouse expansions throughout the whole of South Africa.
2014 was a great year for Takealot.com, from a $100 million dollar investment from Tiger Global, to the successful purchase of Mr Delivery and Superbalist.com.
Enter Naspers, remember from earlier? With takealot.com’s incredible success, Naspers Kalahari.com and Takealot successfully merged in May 2015.
Takealot’s footprint in Africa is largely due to its involvement in Black Friday – the first South African eCommerce retailer to do so. Takealot’s sales from 2017 to 2018 resulted in a 125% gross merchandise value (GMV), with orders up by 127%. Consequently, Black Friday served as the dawning of Takealot.com’s success in the South African market.
The Rise of Leroy Merlin
In 1923, France, Adolphe Leroy and Rose Merlin opened Au Stock Americain, a hardware store that sold American surplus DIY products. In 1960, this hardware store was renamed Leroy Merlin, and broke into new markets outside of France by 1989.
In 2015, Leroy Merlin bought in a whopping revenue of 17.9 billion euros (inc. tax) and 3.6% annual growth. Much like Takealot, Leroy Merlin’s exceptional metrics and customer-centric approach lives up to its commitment: to provide home improvement solutions tailored to each customer’s specific needs.
Jump to 2022, and Leroy Merlin has 32 autonomous companies in the likes of 13 countries, including several European countries, Brazil, and Africa. Not only does Leroy Merlin strategically places their department stores in the city outskirts, but the stores are also visually pleasing to the eye.
Find out how to sell on Leroy Merlin.
Predictions on Amazon’s launch in South Africa
Expected to launch in February 2023, Amazon’s imminent arrival has faced mixed reviews from the South African public – like developmental debates about sacred land claims in the City of Cape Town, to expressed fears of Amazon ‘displacing’ South African marketplaces. On the other hand, there are high hopes for job development and access to cross-border goods.
Amazon’s entrance into the South African market means increased competition with South Africa’s leading marketplaces like BidorBuy, Takealot and Leroy Merlin.
So, what happens when a giant like Amazon enters into the South African market?
Online Marketplaces in South Africa are Innovative
South African consumers and eCommerce marketplaces are a resilient bunch. BidorBuy’s innovative auction and purchase USPs – as well as having easy payment and transfer solutions that piqued the interest of the big guys – resulted in strong comebacks after each iteration.
Takealot’s Blue Dot sales and Black Friday deals spurred its expansion and turned it into one of the spearheads in the South African eRetail market. Their unbelievable brand awareness, consumer trust, strong logistics network, and support for small and large retailers, mean that Takealot is unlikely to be replaced.
Leroy Merlin’s 99-year legacy and its strategically placed locations ensure reach to a wide and loyal customer following. Not to mention that with increasingly excellent metrics and its customer-centric approach, it’s no wonder that Leroy Merlin is a leading player in home and DIY.
So yes, Amazon’s launch in South Africa will spur some competition with leading South African online marketplaces – but healthy competition at that!
The bottom line: reach larger audiences with a multi-channel strategy.
If you can’t beat them, join them.
Since more and more channels are following Takealot with Black Friday deals, it’s useful to access multi-channel platforms to help manage your product data feed in order to reach a wider audience.
How you list your products is key. Get your product feeds optimised through a multi-channel strategy, like the ShoppingFeeder app or by using FeedNexus for agencies. These platforms are useful in getting your product feeds in top shape before reaching various audiences on several marketplaces, and removes the anxiety of listing products one-by-one.
Take Advantage of Black Friday
It worked for Takealot, so it can work for you! The marketplaces that use Black Friday to their advantage ensure higher traffic, guaranteed conversions and is an excellent way to get your name out there.
Convenience always wins
Convenience is more important than ever. Not just for the buyer, but also the retailer. Consider reaching new audiences through convenient channels too, like Facebook marketplace.
You can integrate your Facebook profile with ShoppingFeeder to drive those conversions.
Sell globally
Crossborder eCommerce is the next big thing. Why not leverage your products on a global scale? ShoppingFeeder’s tool comes with the added perk of listing products on Shopping.com, amongst other globally recognised marketplaces, like TikTok.
Support local
Amazon’s imminent arrival might mean increased competition, but one shouldn’t forget the potential of the South African eRetail marketplace, projected to reach a revenue of USD 13.83 billion by 2025.
All in all, the outlook doesn’t look too bad, and there’s no harm in a little healthy competition – particularly given that South African marketplaces are bigger, better and more resilient than ever.
Are you an eCommerce retailer? Or are you representing an eCommerce retailer that’s got the goods? ShoppingFeeder is here to help.
Conclusion
The rise of South Africa’s largest marketplaces came through grit, determination and taking advantage of novel payment schemes and Black Friday deals. Upon Amazon’s arrival in South Africa, retailers can expect a healthy dose of competition, but it’s important to remember that with the right strategy. By using innovative technology to our advantage, we can expect prosperity in local and global marketplace success.
