The Small Business Institute (SBI) has asked the Competition Commission to exercise caution around online marketplace dominance.
This follows after commissioner Tembinkosi Bonakele told delegates at a conference this week about online marketplace Takealot and other major players becoming a subject of investigation for proactive abuse of dominance.
Bonakele dubbed this as a proactive approach to determine any potential abuse of dominance before it manifested.
The SBI states that while it is fully supportive of regulations and sanctions against the potential harm of such abuse, particularly to smaller players in downstream markets, the institute suggests that there may be other priorities to enable a more competitive digital economy.
These priorities include extending the footprint and lowering costs for broadband, enhancing computer skills training and investing in national research and development.
The SBI adds that, in the wake of lockdown and an economically destructive decision by government to forbid most e-commerce and online sales, the timing of the commissioner’s suggestion could not be worse.
The institute explains that the United Nations Africa Marketplace Explorer – which identifies Gumtree as larger than Takealot – identifies dominant players, but also suggests they face considerable competition.
Their research confirms that the world’s largest marketplaces do not have a strong presence in Africa, which open up opportunities for local marketplaces. South Africa already has over 100 online marketplaces, more than any other country on the continent.
Most sites are classifieds; relatively few are transactional, but 80% are domestic players.
In 2019, Takealot received 114-million visitors, or 17.5% of the 650-million visitors to South African online marketplaces.
“Online marketplaces represent a real opportunity for small, medium- and micro-sized enterprises to trade,” affirms SBI CEO John Dludlu.
He adds that online marketplaces also make it easy by handling payments and logistics and removing the requirement for a small business without the right skills or infrastructure to set up their own websites and distribution channels, let alone to access a wider – even regional or international – market.
On the cusp of the world’s Fourth Industrial Revolution, South Africa risks being a no-show, not just a latecomer, if it does not prioritise a course of action to enable businesses to leap into the future, says the SBI.