Takealot launches scheme to drive township economy
The online retailer is taking aim at Temu, Shein and Amazon, which it says want to open warehouses, not stimulate jobs and manufacturing. By
As competition from the East – and the West – intensifies, Takealot is firming up its position in South African retail by expanding its township offerings, demonstrating its commitment to the economy.
Taking a dig at its international competitors Temu, Shein and Amazon, the online retailer says it wants to stimulate local jobs and manufacturing, not see a country full of warehouses.
Through a new compact with the Gauteng government, Takealot wants to help to drive entrepreneurship in underserved areas of the country to provide opportunities for residents of these areas to work, sell their products and create jobs and economic growth.
It is hoped that about 20,000 jobs will be created through the programme.
The retailer and provincial government signed a memorandum of understanding in Mamelodi in Gauteng last week, aimed at stimulating economic growth and creating employment opportunities for historically disadvantaged individuals living in underserved areas of Gauteng.
The programme will not be limited to Gauteng, Takealot Group CEO Mamongae Mahlare told Daily Maverick: it’s only starting up north but the intention is “most definitely” to make it a national project, depending on the progress and the collaboration of each of the different provinces.
Consisting of six schemes, the Takealot Township Economy Initiative will be focused on creating jobs and supporting small businesses owned by black people in underserved communities across South Africa.
Mahlare explained in an accompanying press release that stimulating economic growth and creating employment opportunities is the intention. “As a home-grown local champion for small SA businesses, we believe that the partnership with the Gauteng provincial government will contribute significantly towards accelerating a conducive environment for developing the township economy in the province.”
The Takealot Group incorporates Takealot.com, Mr D and Superbalist. The programme will include the following:
Takealot Personal Shopper Programme
Open to South Africans and permanent residents, personal shoppers can earn by buying products on the Takealot platform for their own customers. They help customers to navigate the platform, get the best deals while earning commission and save on travel costs while building trust in e-commerce.
Takealot Delivery Team Last Metre Driver Development Programme
Takealot plans to recruit 2,000 drivers who will join the Takealot franchise network within five years. Drivers can work full-time or part-time and receive free training.
Takealot Township Franchise Development Programme
This programme helps entrepreneurs to hone their business skills by offering training, financial and technical support to 10 franchisees over the next five years.
Mr D Mzansi Trailblazer Restaurant Programme
The programme gives black-owned restaurants in townships trading benefits to boost sales on the Mr D platform. There will be no sign-up fees for joining the platform and regular training will be offered. Restaurants will also be given R1,000 in advertising credit for the first three months of trading on Mr D, and Mr D will give them a dedicated promotion each month to increase customer
awareness on the platform.
Superbalist Stock Reseller Programme
Township customers will be able to buy new, high-quality apparel at affordable prices. This programme will help to grow the clothing market in townships by allowing SA entrepreneurs to resell unsold or returned stock at a reduced rate.
Takealot Marketplace SME and Local Industrialisation Programme
Takealot will provide expert support, waive subscription fees for 12 months, offer training and provide free advertising credits for product launches and oneyear Proudly SA memberships for qualifying manufacturers.
Elephants in the room
The entry of Temu and Shein, which have exploded in the local market, and the imminent arrival of Amazon are putting immense pressure on small businesses and existing businesses like Takealot, which don’t have a multinational’s deep pockets and reach, Mahlare admits.
“The biggest thing we have noticed is how it’s impacting the digital cost of acquisition of advertising. I don’t think there’s a single person who’s opened up Youtube in the past two months who has not been fed tons and tons of Temu adverts.
What that does is that it increases the cost of digital customer engagement by over 200%, which not only affects digital marketing costs, but also affects small businesses and local entrepreneurs trading on our platforms who also need to be participating in the market. For us, it is also more costly.”
For Takealot, the issue goes far beyond the impact on the cost of digital marketing. It’s about what it is doing to the economy.
“It’s important that the Department of Trade, Industry and Competition [DTIC] considers how we deal with offshore online businesses because of the potential lost opportunity in terms of tax revenue and economic participation,” says Mahlare.
“Fred [Zietsman, Takealot’s CEO] aptly pointed out that we cannot – and we should not – become a country of warehouses.
“We are trying to industrialise and get real production going, which means we need to localise manufacture.”
Offshore online businesses threaten localisation efforts because nobody can compete with their costs, but they take away jobs and the country’s ability to export, industrialise and manufacture, causing a loss of tax revenue, she says. “There’s a huge risk that we are eroding the very foundation of our
economy very slowly.”
Since online fast fashion outlets Shein and Temu launched in South Africa, the Asian giants have gained significant market share by offering goods at ridiculously low prices.
Industry stakeholders have called on the DTIC to investigate both Shein, which launched four years ago in SA, and Temu, which arrived here in January. Concerns have been raised that they are bucking the system by avoiding taxes by misdeclaring items or under-reporting the value of goods.
But Donald Mackay from XA Global Trade Advisors observes that, although Temu and Shein may be adding to the problems besetting the South African clothing sector, they are not to blame.
Citing Stats SA data, he says employment in clothing manufacture halved between 2009 to 2023 – much of it preceding the entry of Shein and Temu.
“The sectoral master plan did nothing to arrest this decline and in fact may have accelerated it. R10-billion was given in subsidies to clothing manufacturers in the last four years, the rough equivalent of the minimum wage of every single person working in the sector. Still employment declined.”
Then there’s the 22.5% average import duty on textiles. Only signatories to the master plan are eligible for duty relief if they commit to buying a minimum quota of textiles from the textile signatories and only sell to the retail signatories.
“The result? Production shifted to Botswana, Eswatini, Lesotho and Namibia. After all, [all other retailers] besides the Big 7 are not signatories and so are locked out of the benefit… The sector is unable to adjust to the market,” says Mackay.