<\/p>\n
Major listed retailers, including Mr Price, Woolworths and Pepkor, are leveraging Takealot\u2019s market-leading logistics infrastructure to help run their own e-commerce operations, including distribution.<\/p>\n
This division, Takealot Fulfilment Services (TFS), is its newest and helped the group report a full-year trading profit (R171 million) for the first time. The group is also cash flow positive.<\/p>\n
Listen: Takealot says local sellers are losing out to foreign merchants<\/p>\n
TFS saw revenue almost double (+93.5%) in the year to 31 March at what would be significantly better margins than the core e-commerce unit (Takealot.com).<\/p>\n
The group, owned by Naspers, would not disclose margins for its three units (the third is Mr D) but confirmed that all three are profitable.<\/p>\n
CEO Frederik Zietsman hinted that the core business operated at a margin of 1% and acknowledged that it needs \u201cto improve that\u201d. In the last year, it expanded its gross margin by 1.5 percentage points.<\/p>\n
With TFS, the group is effectively reselling existing logistics capacity that it already owns.<\/p>\n
\nIt sells courier services, on-demand delivery, warehousing and fulfilment, as well as global freight forwarding to more than 3 300 customers.<\/p>\n<\/blockquote>\n
Many of these are small businesses trading on its marketplace platform. More than half of the largest marketplace sellers use TFS. Because this capacity already exists, a not-insignificant chunk of TFS\u2019s revenue would drop straight to the bottom line.<\/p>\n
CFO Tessa Ackermann says TFS \u201cis the one to watch\u201d in the coming year and this bullishness is due to the \u201ccompounding financial revenue impacts that it will have on this group in years to come\u201d.<\/p>\n
TakealotMore <\/strong><\/p>\n
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CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
Its TakealotMore subscription service, which offers free deliveries for plans which cost either R39 or R99 a month, has helped drive top-line growth as well as profitability.<\/p>\n
Member numbers grew by 74% in FY 2026 and it says it delivered around R700 million in savings to them.<\/p>\n
Zietsman describes the launch of More as an \u201cinflection point\u201d and adds that these subscribers \u201cmake up more than 27% of the base\u201d of Takealot.com.<\/p>\n
\u2018Billion-dollar\u2019 business<\/strong><\/p>\n
In the year, the platform grew gross merchandise value (GMV, or total sales volume) by 15%, with revenue growing by 17%.<\/p>\n
Marketplace, which enables third-party sellers to trade on the platform, accounts for 60% of sales and now has 15\u00a0000 active sellers.<\/p>\n
\nOver 60 million orders were processed by the group in the financial year and Zietsman says 35% of orders on Takealot.com are delivered on the same day or the next.<\/p>\n<\/blockquote>\n
It has a catalogue of 800\u00a0000 products that can be delivered \u201ctoday and tomorrow\u201d which is \u201cby far the biggest\u201d in the country.<\/p>\n
Read: Naspers adopts The Prosus Way<\/p>\n
The core unit reported revenue of R14.8 billion, which comprises 84% of group revenue (R17.7 billion). Zietsman says this means the group is a \u201c$1 billion revenue business\u201d.<\/p>\n
Helping national players grow<\/strong><\/p>\n
After the success of its partnership with Pick n Pay, where the retailer offers on-demand groceries in the Mr D app, the unit has onboarded a handful of other national retailers to extend their reach.<\/p>\n
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These include Absolute Pets (owned by Woolworths), Wellness Warehouse, Toy Kingdom, Nespresso and Frozen for You.<\/p>\n
Grocery orders on Mr D (i.e. non-takeaway food) grew by 38% in the year, far outstripping overall sales growth (GMV) of 12.6%.<\/p>\n
Going forward, it sees this unit focusing on the \u2018hyper-local\u2019 space.<\/p>\n
\u2018Just the beginning\u2019<\/strong><\/p>\n
Zietsman is understandably optimistic. He says the digital economy is just starting in South Africa.<\/p>\n
Citing the experience in other developing markets such as India, Brazil and Turkey, he adds that the SA market \u201cis going to double in the next five years\u201d. Currently, e-commerce penetration is at approximately 10%, and the group commands a sizeable share of that, with 6.2 million active customers.<\/p>\n
So far, it has held its own given the competitive threats posed by global e-commerce players such as Temu and Shein (both Chinese) as well as Amazon.<\/p>\n
Listen\/read:\u00a0SA clothing industry applauds tax on online retailers Temu and Shein<\/p>\n
He says there has been a \u201csurge of competition\u201d in the last 18 to 24 months and that this is not unique to SA. Zietsman admits that as the market has expanded, it has seen \u201csome dilution\u201d but that globally, incumbents in markets tend to \u201chang on to most of their share\u201d because of the \u201cscale and the velocity they\u2019ve got\u201d.<\/p>\n
\u201cWe\u2019re very happy for the market to grow because that means more South Africans are shopping online.\u201d<\/p>\n<\/p><\/div>\n
#Rival #retailers #Takealots #tech<\/p>\n","protected":false},"excerpt":{"rendered":"
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