Takealot challenges Post Office's monopoly on small parcel deliveries

E-commerce retailer Takealot has filed "a notice of intention to amend the notice of motion" in the marathon legal battle by the  Independent Communications Authority of South Africa (Icasa) and SA Post Office (Sapo) to maintain a monopoly for Sapo in the delivery of sub-1 kilogram parcels.

This comes as the pleading stage in the matter continues until mid-August, according to confirmation by the Acting Sapo CEO Fathima Gany and the Business Rescue Practitioners after an update to Parliament's Portfolio Committee on Communications and Digital Technologies.

The monopoly, as outlined in the Postal Services Act, has been challenged and was extended to April 1, 2025. This comes as the private sector capitalises on Sapo's inability to enforce the monopoly due to its ongoing financial difficulties.

Gany told Parliament that there had been ongoing meetings with Takealot, which has now filed a notice of intention to amend its legal position in the sub-1 kg dispute.

Sapo, supported by Icasa initially took PostNet and the South African Express Parcel Association (Saepa) to court in 2018. The objective was to uphold the law and prevent these private players from delivering small parcels. However, the private courier firms won that round, especially after larger operators like Takealot joined the legal battle.

Joint Business Rescue Practitioner of Sapo Anoosh Rooplal told Business Report, "The Post Office currently still has the exclusive licence to deliver sub-1 kg parcels, but this is being encroached upon by the private sector. The case is still pending, and the regulator, Icasa, is currently at the pleading stage, which is scheduled to conclude on 14 August 2025, as per the latest request. The Post Office supports Icasa in this case and will ultimately benefit if their arguments to preserve the monopoly are upheld."

The case, led by Icasa as the regulator, is up against the courier sector, represented by Saepa, which is challenging Sapo's exclusive rights to deliver packages under 1 kg - a competitive advantage in the growing e-commerce and rural logistics markets.

Sapo has acknowledged in its Corporate Plan to 2030 that it faces increasing competition from more agile and technologically advanced private courier services. Without a major overhaul of its digital capabilities, Sapo risks losing even more market share to these competitors, particularly in urban areas.

"PostNet is our competition. It has our service offering. That is what a Sapo branch is - or should be. A futuristic Sapo branch is where you can walk in and get an array of services: internet café, access to Hotmail to look for jobs, anything that you want to do that you cannot do at home. You can walk in and collect our parcels. It’s a central hub," Gany said.

Meanwhile, the Department of Communications and Digital Technologies has indicated its intention to review Sapo’s monopoly on certain postal services, including the delivery of parcels weighing less than 1 kg.

According to Sapo, the South African Courier, Express, and Parcel market was valued at R48 billion in 2023 and is projected to reach R78bn by 2030. This growth is attributed largely to the e-commerce sector, which is expected to grow at an annual rate of between 10% and 15% over the next three years.

BUSINESS REPORT