Amazon in South Africa is Forcing Sellers to Cut Prices

Amazon in South Africa is Forcing Sellers to Cut Prices
Photo: Getty Images 02.07.2024 375

This was reported to MyBroadband by a group of South African resellers.

Amazon South Africa’s marketplace has been accused of forcing sellers to adjust the prices of their products so that they match or beat their listings on other online platforms like Takealot.

MyBroadband first learned of the alleged practice from a South African reseller group that represents sellers on several eCommerce websites in South Africa.

One of the members posted a warning to other sellers that Amazon automatically forced them to set pricing the same as on Takealot, or their product would not feature the “Add to Basket” button.

Although a customer can still buy the items, not having the “Add to Basket” button on the listing makes it far less likely to be seen or bought.

As MyBroadband notes, on the day Amazon.co.za launched on May 7, 2024, the pricing of many products on Amazon and Takealot differed significantly. However, as time passed, many of the products on Amazon saw their prices reduced to be identical to the ones on Takealot sold by the same resellers.

Amazon acknowledges that it constantly compares its pricing to competitors to ensure its prices are as low or lower than those of all relevant competitors.

While this could benefit shoppers, it makes it difficult for sellers who want to participate in sales or promotions on other sites but not on Amazon.

Based on its previous actions, the Competition Commission is highly likely to take issue with the action, which seems eerily similar to implementing a price parity clause. Following its Online Intermediation Platforms Market Inquiry, the commission required Takealot and Booking.com to scrap its “narrow price parity” clause in contracts with sellers. 

Before the commission’s ruling in South Africa, the European Union (EU) had already cracked down on the practice and forced Booking.com to remove it within the EU’s jurisdiction.

While Amazon quietly killed its price parity clause in the US in 2019, a new lawsuit alleges that it began interpreting its “Brand Standards,” a so-called “Fair Pricing” Policy, and a “Seller Code of Conduct” to make it a “violation” for a seller to offer an item off Amazon for less than it sells the same item on Amazon.

Source: MyBroadband

digital markets  South Africa 

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