Takealot takes action after allegations of price-gouging for portable power stations

A screengrab of the GiZZU advertised via Builder's Warehouse

By Georgina Crouth

27 Dec 2022

The platform has already suspended one third-party seller, who more than doubled the prices of the in-demand Gizzu power stations, but now another seller has stepped in to take advantage of Eskom's collapsing grid.

Takealot has suspended a third-party seller from its marketplace, after complaints of price gouging on a popular portable power station. This comes after consumers noticed a spike in the price of one of the hottest commodities during this seemingly neverending season of rolling blackouts: the Gizzu Portable Power Station.

Debate about the devices was set off by reviews of the Gizzu 150, 296 and 518 by trader Dwaine van Vuuren on Twitter, who posted on Wednesday, 21 December: “After nearly a month of use, I formally vouch for this product Gizzu 296. Paid R4,700 on Black Friday but range from R5,500-R9,000 so shop wisely. Slams 4hr loadshedding with 40% battery spare with 65cm TV, AppleTV & Soundbar with subwoofer. Runs desktop PC or iMac 27" for 6 hrs”, followed by “The Gizzu portable UPS stock situation in SA is ridiculous leading to price gouging, Can an official rep for Gizzu please inform the public if they gonna meet demand or must people look elsewhere for another manufacturer to avoid getting gouged”.

Demand had already shot up on Takealot for the devices at the end of last month, as shown by Serval Tracker, which records the historic price of the top-rated products on Takealot.

The Gizzu 296, for example, listed in February for R10,689, has possibly suffered more price fluctuations than Eskom’s power grid, but on 27 November one third-party retailer hiked prices progressively over three weeks, from R4,799 to R10,999.

Their Gizzu 518 saw the steepest price increase, shooting up from R6,799 on 28 November to R15,999 on 15 December, where it remained until 23 December.

A screengrab of the Takealot advert of the Gizzu Portable Power Station

On 16 December, another third-party pushed it even further, cashing in on the thirst for Gizzus, selling a 518Wh power station for R16,999.

By contrast, the 296 is available at Builders Warehouse for R5,599 and the 518 for R8,399.

Asked about the wild fluctuations in price, Ryan Martyn, co-founder and sales director of Syntech – the supplier of the Gizzu power stations – told Business Maverick that price gouging was a big concern and damaging to their brand because third-party sellers, who have nothing to do with their company, were taking advantage of rampant market demand.

Syntech has recommended retail prices of R2,999, R5,999 and R8,999 for the 155, 296 and 518Wh Gizzu devices respectively, which are listed accordingly at brick-and-mortar stores, but not on e-commerce platforms such as Takealot.

A screengrab of the Gizzu Portable Power Station advertised via Builder's Warehouse

“The [ecommerce] model allows for one listing to have multiple sellers, so what happens is the nature of the marketplace allows for anybody to compete and deliver the best price to the market.”

Read in Daily Maverick: “Naspers pumps money into ecommerce — but Takealot takes a pummelling”

When in stock, the best price typically wins, but the downside is that when there is no stock on the platform, Takealot's algorithm allows any retailer with supply to be up to 20% more expensive. The ruling price on the website is supposed to offer consumers the best deal.

Currently out of stock of Gizzu power stations, Syntech is awaiting a new shipment early next month.

Third-party sellers, who have stock, are therefore cashing in.

Visit Daily Maverick's home page for more news, analysis and investigations

“Takealot does carry stock of the Gizzu products and I have no record of them increasing prices to capitalise on shortages. Unfortunately, when Takealot and their supplier are both out of stock of a product, their listing offer is temporarily disabled until supply resumes. This is what happened to the current listings for Gizzu power stations.

“Without Takealot’s listing of the product active on their website, the marketplace sellers have been able to increase their prices well above the 20% threshold over the lowest offer.”

Read in Daily Maverick: “Hand sanitiser price gouging — it’s been almost two years and still no judgment”

With the recent shift to Stage 6 rolling blackouts, demand has outstripped supply of the power stations and Syntech has had to ramp up production to increase supply levels in the coming months.

Takealot, meanwhile, has moved to clamp down on price gouging, by suspending marketplace sellers when they receive valid complaints.

A Takealot spokesperson said they aim to be the “most customer-centric online shopping destination, offering great products at great prices”.

“Takealot has strict compliance requirements in place that regulate the behaviour of marketplace sellers that trade on our platform to ensure customers are getting the best products at the best prices.

“With regards to the sale of the Gizzu 518Wh Portable Power Station 1 x 3 Prong SA Plug Point, the Takealot compliance team, who are continuously monitoring our marketplace sellers, raised concerns around the device price fluctuation and acted by suspending the marketplace seller product on our platform.”

Takealot is investigating the reasons for the price fluctuations and said further claims of price inflation could result in the suspension of the seller’s account.

“We take full responsibility for ensuring our pricing is fair and transparent, and would never intentionally mislead our customers with regards to any aspect of their online shopping experience.” BM/DM

Categories:

Business Maverick

Tags:

DM is much better if you are signed in...

Business Maverick