Ina Opperman
Business Journalist
3 minute read
8 Apr 2021
7:00 pm

Much-needed online shopping competitor launched 

Ina Opperman

The Competition Commission is worried about fair competition in the online shopping market, but Everyshop could shake things up.

Everyshop will offer an extensive product range including electronics, appliances, furniture, fashion, beauty, fitness and DIY. Image: iStock

 

The first real Takealot competitor, Everyshop, was officially launched last week after public testing in March.

This comes after the Competition Commission decided to conduct a market inquiry into online intermediation platforms such as Takealot.

Everyshop is part of Pepkor’s JD Group that operates local retail chains such as Russels, Bradlows, HiFi Corporation and Incredible Connection.

According to JD Group, it will offer an extensive product range including electronics, appliances, furniture, fashion, beauty, fitness and DIY.

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Products will include leading brands such as Nike, Apple, Revlon and Samsung, as well as a wide range of local brands, such as Me&B, The T-shirt Bed Co. and Move Pretty.

JD Group says Everyshop was designed to be mobile-first and easy to navigate, with a tailored departmental shopping experience that addresses very specific consumer needs, such as ‘Work from home’, ‘Enjoy the ultimate entertainment experience’ and ‘Achieve the latest on-trend fashion and beauty look’.

Everyshop’s nationwide distribution network includes two dedicated fulfilment centres and 15 large-scale distribution centres, to ensure fast and affordable fulfilment for everything – from small, high-value goods to large items such as appliances and furniture.

Market enquiry

According to the commission, digital platform markets have been at the forefront of the global competition law debates in recent years.

This is due to the growing importance of digital platforms in the economy and the high levels of concentration in many of these markets.

“A number of competition authorities have initiated market inquiries or investigations to address the unique challenges of digital markets.

“This was done after they recognised that normal enforcement tools may be inadequate on their own to prevent initial market leaders from durably entrenching their position and addressing the irreversibly concentrated platform markets,” the commission said.

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The inquiry will focus on online transactions between business and consumers for goods, services and software and include e-commerce platforms, travel aggregators, food delivery, short-term accommodation rentals, online classifieds and app stores.

The commission said the online economy is rapidly growing in importance as a result of the pandemic, and therefore it is essential that competition in the online economy is not hindered, and the participation of SMEs and businesses owned and controlled by historically disadvantaged people is not undermined.

Barriers to entry

According to the commission, features of these online markets and the platform business models have been found internationally to create barriers to entry for rival platforms.

This is done through practices such as pricing parity clauses, exclusive agreements or conglomerate data sharing and cross-promotion.

Some platforms also makes business users rely on them, giving rise to issues regarding self-preferencing, discrimination, unfair trading terms, extraction of business data and the potential distortion from ranking algorithms, all impacting on competition and participation amongst business users on these platforms.

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The commission noted that some markets in South Africa are already becoming concentrated, with business users starting to complain.

The commission said it believes an inquiry will have substantial benefits, such as increased transparency regarding the business practices of online platform markets, and how these practices are impacting on competition amongst platforms and business user participation.

Ina Opperman