South Africa’s anti-monopoly watchdog has launched an investigation into e-commerce challenger Bob Shop.
The Competition Commission has launched an investigation into Bob Shop over its new standard shipping system, MyBroadband has learned.This offered buyers and sellers flat-rated delivery options through a selection of couriers that had been integrated into the system.
In its response to the Competition Commission, Bob Group explained that it made the standard shipping option compulsory because some sellers exploited Bob Shop’s former ability to set their own shipping prices. Without a standardised shipping system, buyers were also not receiving consistent communication about their purchases. Often they would receive no details while waiting for a delivery.
“It is not reasonable or technically possible to expect us to integrate with every single shipping provider in the country,” the company said. “While the changes to how the shipping worked was disruptive to some sellers, we think those that were the most vocal about it were those previously profiting from charging excessive shipping rates to their buyers on Bob Shop.”
“If you take an extreme example where the seller sells R1 items, they would have to increase the selling price of that item by R0.30, i.e. from R1.00 to R1.30, in order to ensure they always cover the seller’s shipping fee,” he said. “We have had to build a new team to manage and follow up on these shipments, which is not included in the baseline courier costs but comes at an additional expense to us,” Higgins said.
Sellers can choose whether to do this up-front in bulk or on lead-time, but ultimately all goods sold on Takealot’s platform must go through one of its warehouses. “It is interesting to me that the Competition Commission does not really seem to take profitability into account,” he said.
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