South African small businesses say they are being pushed out of online retail space on Takealot’s Marketplace, blaming both the e-commerce giant and the country’s Competition Commission for rules they say favour foreign sellers.
At the centre of the dispute is the platform’s Buy Box — the small but powerful feature that automatically selects which seller’s offer most customers see first.
For many merchants, winning the Buy Box can mean the difference between making a sale or being completely ignored. Industry estimates suggest more than 90% of shoppers click the default option.
Local sellers argue that recent changes to how the Buy Box works have made it harder for them to compete.
What changed
Following a 2023 Competition Commission inquiry, Takealot was directed to adjust its system so the Buy Box highlights the lowest price, rather than prioritising faster delivery.
The Commission said consumers do not always value speed over affordability.
But many small businesses say the change has backfired.
They claim it has allowed ultra-cheap cross-border sellers — mostly from China — to dominate the default spot, even when delivery times stretch to two or three weeks.
Why local sellers are worried
South African SMEs say they simply cannot match those prices.
Unlike foreign sellers, they face:
- local warehousing costs
- shorter delivery commitments (3–5 days)
- stricter tax and compliance rules
- higher operating expenses
Some merchants also allege that certain overseas sellers use intermediaries or rotate bank accounts to stay below VAT thresholds — claims Takealot denies.
The company maintains that all sellers follow the same tax, regulatory and platform requirements.
Bigger picture
Takealot says cross-border selling is normal in modern e-commerce and helps expand consumer choice while lowering prices. The company adds that it is “responsibly piloting” international sourcing to stay competitive.
However, local businesses fear that price-only competition could squeeze them out entirely.
With global players like Temu entering the South African market, pressure on pricing is intensifying — raising broader questions about how to balance:
- affordability for consumers
- fair competition
- and protection for local enterprises
The Competition Commission did not respond to requests for comment before publication.
For now, many SMEs say they feel invisible on their own digital shelves.
