Takealot is South Africa’s largest eCommerce company, with a gross merchandise value (GMV) of $1,493 (R26.9 billion). GMV is the total value of merchandise sold.
Sales through the Takealot.com platform increased by 27% over the last year, food sales through Mr D increased by 51%, and fashion sales through Superbalist.com increased by 42%.
Although online sales are still a small part of overall retail in South Africa, it is showing strong growth and is becoming increasingly important for brick-and-mortar retailers.
Prominent retailers like Makro are losing market share against Takealot, especially in product categories like electronic equipment.
They will also face increased competition if Amazon.com launches in South Africa, which is expected to happen early next year.
Shoprite, Woolworths, and Massmart have all launched aggressive eCommerce strategies to prepare for the online shopping revolution.
Here is a summary of what these brick-and-mortar retailers are doing in the online shopping space.
Shoprite, through Checkers Sixty60
https://dailyinvestor.com/wp-content/uploads/2022/09/Checkers-sixty60-300x169.jpg 300w, https://dailyinvestor.com/wp-content/uploads/2022/09/Checkers-sixty60-768x432.jpg 768w, https://dailyinvestor.com/wp-content/uploads/2022/09/Checkers-sixty60-600x338.jpg 600w, https://dailyinvestor.com/wp-content/uploads/2022/09/Checkers-sixty60.jpg 1200w" alt="" width="1024" height="576" class="wp-image-3252" style="box-sizing: border-box; height: auto; max-width: 100%; vertical-align: bottom; border-style: none; border-radius: inherit; background-color: rgb(248, 249, 250);" loading="lazy" data-mce-src="https://dailyinvestor.com/wp-content/uploads/2022/09/Checkers-sixty60-1024x576.jpg" data-mce-style="box-sizing: border-box; height: auto; max-width: 100%; vertical-align: bottom; border-style: none; border-radius: inherit; background-color: #f8f9fa;" />Checkers launched its Sixty60 online shopping services in select locations in Sandton, Johannesburg, and Cape Town in November 2019.
Over the last three years, the company rapidly expanded its operations and is the premier online grocery shopping service in South Africa.
Shoprite said Sixty60 was experiencing exponential growth, increasing its sales growth by 150% over the last financial year.
The Sixty60 app notched up 2.4 million downloads, and the service is available from 300 Checkers locations.
Shoprite has not released revenue or sales data related to its Sixty60 service, indicating that it is still a very small part of overall revenue.
It only stated that Sixty60 sales are still less than 5% of the group’s consolidated revenue.
Woolworths
https://dailyinvestor.com/wp-content/uploads/2022/08/Woolworths-300x169.jpg 300w, https://dailyinvestor.com/wp-content/uploads/2022/08/Woolworths-768x432.jpg 768w, https://dailyinvestor.com/wp-content/uploads/2022/08/Woolworths-600x338.jpg 600w, https://dailyinvestor.com/wp-content/uploads/2022/08/Woolworths.jpg 1200w" alt="" width="1024" height="576" class="wp-image-1769" style="box-sizing: border-box; height: auto; max-width: 100%; vertical-align: bottom; border-style: none; border-radius: inherit; background-color: rgb(248, 249, 250);" loading="lazy" data-mce-src="https://dailyinvestor.com/wp-content/uploads/2022/08/Woolworths-1024x576.jpg" data-mce-style="box-sizing: border-box; height: auto; max-width: 100%; vertical-align: bottom; border-style: none; border-radius: inherit; background-color: #f8f9fa;" />Woolworths’ total online sales growth was 16.4% for the 2022 financial year, with a 12.4% contribution to the group’s total revenue.
The biggest contribution to online sales came from its Australian and New Zealand operations – David Jones and Country Road.
David Jones’ online sales grew by 28.7% and contributed 22.8% to its total sales. Country Road’s online sales grew 4.6% and contributed 31.6% to its total sales.
Woolworths Food’s online sales grew 45.4% in South Africa, contributing 3.2% to total sales. Fashion sales grew 13.2%, contributing 4.4% of total sales.
Massmart
https://dailyinvestor.com/wp-content/uploads/2022/08/Makro-1-300x169.jpg 300w, https://dailyinvestor.com/wp-content/uploads/2022/08/Makro-1-768x432.jpg 768w, https://dailyinvestor.com/wp-content/uploads/2022/08/Makro-1-600x338.jpg 600w, https://dailyinvestor.com/wp-content/uploads/2022/08/Makro-1.jpg 1200w" alt="" width="1024" height="576" class="wp-image-1722" style="box-sizing: border-box; height: auto; max-width: 100%; vertical-align: bottom; border-style: none; border-radius: inherit; background-color: rgb(248, 249, 250);" loading="lazy" data-mce-src="https://dailyinvestor.com/wp-content/uploads/2022/08/Makro-1-1024x576.jpg" data-mce-style="box-sizing: border-box; height: auto; max-width: 100%; vertical-align: bottom; border-style: none; border-radius: inherit; background-color: #f8f9fa;" />Massmart is facing the biggest impact from Takealot’s growth and is investing heavily in its own eCommerce capabilities to compete more effectively in online sales.
Massmart’s latest financial results revealed that it increased total online sales by 47% year-on-year.
Game increased online sales by 72%, Builders with 48.3%, and Makro with 18.6%.
In Massmart’s latest half-year results, the group reported 50% online revenue growth aided by a 140% online transaction growth.
