By: Tebogo Mokwena
Small e-commerce platforms in South Africa have welcomed the Online Intermediation Platforms Market Inquiry, saying that it should address issues of competitive dominance in the digital economy. The Competition Commission’s final Online Intermediation Platforms Market Inquiry report was expected to be released in April, but it has been extended to the end of June. The preliminary findings of the report released last year, identified anti-competitive practices by Google and Takealot.
The commission says market features that impede, distort, or restrict competition among the platforms undermine the purposes of the Competition Act. These include ensuring that businesses and consumers who use online platforms are able to benefit from fair competition among platforms and that SMMEs also get to participate fairly in the online economy.
Although Takealot told Vutivi News that it was not in a position to comment on the matter until the report’s release, SMMEs operating in the sector believe that the report should make suggestions on how to level the playing field. Ethan Fasser, the owner of the e-commerce platform Fassernate, told Vutivi News that Takealot’s abuse of dominance was concerning. He said newer companies may have innovative ideas for driving commerce on platforms, but the fact that they were not backed by millions of rands made it difficult for them to operate in the entry market.
Fasser believes that the release of the final report is a step in the right direction. “We need to find a way to level the playing field and remove the barriers that companies like Takealot created for anyone moving into the market,” he said. Tumi Letsaba, CEO of Next Curve Creations, which operates the Stocke e-commerce platform, said that the growth of companies like Takealot followed the same pattern of how the economy was structured. Only a few owned the lion’s share.
He believes that the growth trajectory of Takealot, which the Competition Commission regards as “tipping markets” which create the likelihood for the rapid expansion of one dominant platform in the market, will have a huge impact on growth in the industry. “I believe that businesses should focus on underserved markets where they stand a greater chance of succeeding,” he said. “Large businesses do not necessarily focus on the underserved markets, so finding a niche in that regard should lessen the pressure of competing for a market share with big businesses.”