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HomeTech NewsTemu smashes Takealot in price comparison

Temu smashes Takealot in price comparison

Temu offers substantially better pricing on small electronics and accessories sold by resellers on Takealot, a comparison by MyBroadband shows.

The direct-from-China marketplace has changed the e-commerce game worldwide with its cheap prices.

Temu sources many of its most affordable products directly from manufacturers and merchandise partners.

As a result, it can significantly undercut middlemen — like Takealot resellers — who have to buy stock from overseas or local suppliers.

While Chinese e-commerce websites like Aliexpress have been around for much longer, they often only offer delivery through the South African Post Office or an expensive courier or mail-forwarding service.

A critical part of Temu’s success in South Africa has been its use of the mysterious Buffalo Logistics, which has proven to be a reliable fulfilment partner.

We looked at listings for identical small electronics and accessories on Takealot and Temu to see how their pricing stacked up.

Temu’s on-site prices do not include import duties or VAT, whereas Takealot’s is inclusive of all cost items except delivery.

Temu’s customers must pay taxes on their products upon arrival at South African customs.

Typical taxes on Temu

The tax rate can vary greatly depending on the type of imported product, but many general electronics and small items sold for under R500 are exempt from special duties.

In these cases, an imported item’s actual cost will be an added tax value (ATV) of 110% of the item’s price plus 15% VAT on the uplifted price.

For example, an electronic product that costs R100 will be priced at R110 ATV, with VAT on the ATV being R16.50. The item’s total price therefore becomes R126.50.

Some electronic products — like TVs and computer monitors — carry substantial additional ad valorem taxes.

Importing these items will often cost more than buying them from a local supplier.

However, we found that small electronics and accessories generally cost substantially less on Temu, even after accounting for taxes.

The biggest price difference in our comparison was on a small USB night light that cost R84 on Takealot, compared with a 10-pack of the same item priced at R26 on Temu.

Mini USB night lights
Mini USB lights priced at R26 per 10-pack on Temu (left) compared with R84 per unit on Takealot

When using the ATV and adding VAT, the total cost per night light on Temu was R3.20. The Takealot seller’s price was 2,525% higher.

The price differences generally grew smaller as the value of the items increased, with a 7-inch tablet for kids costing nearly the same on Takealot and Temu.

It should also be noted that Temu’s range does not include high-end products from reputable and well-known brands.

For example, customers will not find iPhones or official Apple products available in the store.

These products are generally only available through major distributors and wholesalers, which have operating, storage, and after-sales costs that add to the product’s price.

In addition, it would likely be easier to return an item and get a refund from Takealot than Temu, as the latter has no local offices or support.

As it stands, the strength of Temu’s catalogue lies in its small, low-value items that might be difficult to come by in South Africa at reasonable prices.

The table below compares the prices of identical electronics and accessories sold on Takealot and Temu.

Source

mybroadband.com

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