Takealot gears up to sell groceries online – here’s why

Naspers this week reported annual results for the year ended March 2021 and revealed its plan for Takealot offerings to extend “to convenience, grocery delivery and logistics”.

Takealot.com launched a decade ago and joined the Naspers group in 2015. The company has grown from strength to strength since then and is now South Africa’s largest e-commerce retailer.

Takealot growth during pandemic

Following Takealot’s strong performance during the lockdown, the retailer will soon stock and ship perishable goods to customers.

In the latest results, Takealot grew revenue by 65% to R8.7 billion in the past year, while its sister companies Superbalist and Mr D Food also showed strong growth.

This exceptional growth enabled Takealot to reduce its trading loss from R618 million to R101 million over the course of 2020.

Takealot ventured into household items at the beginning of the pandemic with a number of cleaning products, cold drinks and pantry staples.

However, this has mostly been offered as bulk purchases and it will be interesting to see if this change of direction targets weekly shoppers.

Takealot’s delivery infrastructure

Thanks to the franchise’s extensive network of warehouse and distribution centres, same-day delivery of groceries will enable customers to order perishable goods from the comfort of their homes.

Takealot has three large warehouses in Johannesburg, Cape Town and KwaZulu-Natal along with several branches throughout South Africa.

In 2019, the retailer expanded its tech and operational business-wide focus ahead of the expected Black Friday rush.

Founder and CEO Kim Reid at the time said Takealot houses “over 3.7 million items at any given time and has opened 47 Takealot pick-up points in all provinces”.

In addition, about 80% of ordered items are already available on the warehouse shelves, while anything beyond that is ordered and bought from distributors as the need arises.

The warehouse expansion also ensures seamless interaction between the various receiving depots and storage areas, including packaging and shipping.

E-commerce on the rise

Earlier this year, Reid said the “market potential in South Africa still presents a tremendous opportunity”, especially since the Covid-19 pandemic accelerated the rise of e-commerce.

That said, “e-commerce still represents less than 3% of total retail in South Africa. This illustrates the scope, opportunity and work that still needs to be done.”

With South Africa’s supermarkets also stepping up their online shopping game during the pandemic, Takealot will face steep competition when it eventually starts shipping perishable goods.

Checkers’ Sixty60 app promises to deliver groceries from about 150 stores to customers’ homes within 60 minutes, while Pick ‘n Pay acquired Bottles to offer same-day delivery options.