Over the past few years the use of international business platforms has escalated in SA, in line with trends across the world.
From streaming devices such as Netflix to accommodation services like Airbnb and transport services like Uber and Bolt, South Africans have benefited from the twin waves of improved digital access and greater choice for different services, regardless of the origins of the big idea.
For local businesses, the introduction of competitors that have both the international footprint and the scale to implement more flexible and agile pricing models has created new challenges and frustration.
The challenges relating to adapting to a changing market landscape exhibit mixed results across different industries. The transport industry in SA is a complex arrangement at the best of times, and when e-hailing services entered the market tensions escalated between traditional service providers and the new options.
Core to the problem was the regulatory gap that existed between old and new players. The problem in the transport industry is that instances of violence were common before and simply escalated when market disruption occurred and the state was far too slow in addressing the underlying problems.
While regulators often lack the agility of the market players they regulate and implement regulatory responses after witnessing market shifts, the regulatory gap widens when a country’s regulatory regime is conceptualised with local businesses and local value chains in mind.
Rather than transacting in hard currency or using local banking cards to pay for a trip with a licensed taxi operator, consumers are now able to use multiple digital channels to engage the services of operators through platforms that are administered elsewhere.
Rather than using the services of accredited accommodation providers subject to the tourism-specific levies that aid the industry’s viability, consumers are able to tap into digital platforms and access accommodation facilities whose accreditation status is premised on the quality of the pictures posted on the internet.
The challenge for regulatory agencies is to figure out whether each element of the transactional value chain has sufficient regulatory safeguards to implement parity between local and international operators whose point of convergence is the local consumer.
In the absence of regulatory parity local businesses suffer the dual hit of intensifying competition and incrementally higher regulatory and compliance costs that ultimately translate into the pricing of products.
For individual consumers, access to a wider range of products at possibly lower prices has an enduring appeal as no individual customer has the responsibility for ensuring an even landscape for any market. That is the responsibility of regulators.
Over the past few weeks SA regulators have sought to correct some of these gaps through addressing the issues identified in the practices of multinational companies such as Shein, which has naturally raised multiple talking points for consumers and businesses.
In addressing the use of concessions and loopholes that were created to ease administrative burdens rather than prejudice local businesses, regulators have been accused of interfering with consumer choice and implementing punitive duties on some imports.
While consumers who are not well engaged in matters of market regulation might indeed think it’s all too fishy and abrupt, the responsibility of regulators is to both the consumers and the market players that form the backbone of the local industry.
In the absence of a fair and fairly regulated market landscape, the consequential fallout is measured in terms of lost jobs and decimated industries, which has implications for the country.
An ongoing problem relates to the different stages of regulatory maturity and sophistication across various intersectional industries. As the country seeks to form a new economic consensus over the next few years, dealing with questions of regulatory vacuums and gaps in a world where changes are a permanent constant will be important for SA to stand a chance of finding fairness in the global economic landscape.
• Sithole (@coruscakhaya) is an accountant, academic and activist.
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