Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Sita hits back at critics, promises faster, automated procurement

      20 June 2025

      The transatlantic race to create the first television

      20 June 2025

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » In-depth » Will Walmart shake up IT retail in SA?

    Will Walmart shake up IT retail in SA?

    By Editor28 June 2011
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp
    Walmart branding featured prominently in Sunday newspaper campaigns

    Walmart has hit the ground running following its purchase of a controlling stake in SA retail giant Massmart. Sunday newspapers carried glossy Walmart-Massmart advertisements promising discounted prices to consumers and sending a strong message to competitors that the US company means business.

    But will its entry into SA retail shake up the computer retail market and take the fight to market leader Incredible Connection, owned by JSE-listed JD Group?

    Chris Gilmour, investment analyst at Absa, says Walmart’s presence in SA is “going to revolutionise most retail”. He predicts that within two years, “SA consumers are going to see a completely different landscape”.

    Gilmour says he travels abroad frequently and is “gobsmacked” by the disparities between the costs of goods in places like the UK and those same goods in SA. “We should be quite a lot cheaper than we are due to the reductions in import duties in recent years.”

    Walmart, he says, is the biggest importer of Samsung products worldwide. “It has immense buying power. Will that mean lower prices? I suspect so.”

    Gilmour cites the current offer of a Samsung 32-inch LCD TV by way of example. “It’s advertised at R3 500, down from R4 800. That’s a big drop.”

    However, because of SA’s “embedded cost structure”, Gilmour is not sure that Walmart’s price reductions will be as keenly felt in IT retail as it will be in food and fast-moving consumer goods.

    “Being at the tip of Africa, there are logistical factors we have to be aware of,” he says. “It’s trickier to get items to SA – things have to come via ocean or air because they can’t come in by road or rail. Then they have to come inland by road or rail. Walmart will definitely bring its logistical abilities to the fore to combat this.”

    Takealot.com CEO Kim Reid

    In terms of the potential effect on local IT retailers, Gilmour says companies like Incredible Connection have downplayed Walmart’s entry into the market. “Incredible is part of the JD Group. European-based furniture retailer Steinhoff International has a 22% stake in JD and recently bought France’s second-largest furniture retailer, Conforama.”

    Gilmour says Steinhoff has “huge critical mass” as an integrated household goods retailer and this gives JD Group “massive buying power by association”.

    JD Group CEO Grattan Kirk declines to comment for this article, saying it’s too early to tell what effect Walmart’s entry into SA will have. Incredible Connection CEO Dave Miller is travelling abroad this week and is unavailable for comment.

    Gilmour points out that Game and Makro, both owned by Massmart, are not necessarily the first stop for those looking to buy technology goods. But he says that may change now. “Walmart in the US is not just about being the cheapest. It’s about in-store service and an incredibly wide range of products. The question is: will Walmart replicate that model in Games and Makros? I suspect so.”

    He says Game stores are a destination store for people who want “perceived low value”. He adds that although Game isn’t necessarily the cheapest option, it is often seen as such. Walmart is clearly keen to get consumers into stores and convince them to keep coming back. He says running a 10-week promotion, as Walmart and Massmart are doing, is an aggressive way to start doing just that.

    Massmart already owns a technology retailer in the form of Dion Wired, which could form a cornerstone of any strategy by Walmart to compete aggressively in IT retail in SA.

    Kim Reid, CEO of online retailer Takealot.com (formerly Take2), says Walmart’s entry into the SA technology retail market is inevitably going to drive prices down, but he says Walmart’s ability to reduce prices is “probably going to come down to its suppliers, so its ability to change prices may be stilted at first”.

    Reid says that competitors will have to keep an eye on Walmart’s prices and that overall “lower prices are always good for consumers, and so is more competition in the market”.

    “Walmart will doubtless have online channels in due course,” says Reid. “The online space won’t be affected in the short term, but in the long term it almost certainly will be, and online retailers like us have to remain competitive with retail outlets, so you might see online pricing having to be revised to remain competitive, too.”  — Craig Wilson, TechCentral

    • Subscribe to our free daily newsletter
    • Follow us on Twitter or on Facebook


    Absa Chris Gilmour Dion Wired Game Incredible Connection JD Group Kim Reid Massmart Takealot.com Takelot Walmart
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleSA broadband a ‘tragic story’ – Koos Bekker
    Next Article Loss-making Huge Group faces R30m MTN lawsuit

    Related Posts

    Company behind South African-built geyser claims up to 84% energy savings

    15 May 2025

    Absa chairman Sello Moloko to step down

    7 May 2025

    Economic growth could triple this year: Absa

    26 March 2025
    Company News

    Making IT happen: how Trade Link gears up to enable SA retail strategies

    20 June 2025

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.