Retailer Pick n Pay Clothing has launched a partnership with online fashion retailer, Zando.
According to Pick n Pay, from Tuesday, Pick n Pay fashion ranges will be available for purchase on Zando, extending accessibility beyond its physical stores across the country and online at www.pnpclothing.co.za.
Pick n Pay Clothing general manager Hazel Pillay said: “Pick n Pay Clothing customers will have more access to our clothing ranges through Zando, and we look forward to welcoming new customers whom we know will enjoy the quality and affordable pieces of highly desirable fashion that we offer.”
Pick n Pay said through Zando, which was well-established in online fashion and clothing retail, it would be able to diversify its customer base by reaching more customers.
Pick n Pay Clothing will make its debut on www.zando.co.za and on the Zando android and iOS apps.
“We are looking forward to offering our customers another channel to access our popular clothing ranges, and to welcoming new customers into the fold,” said Pillay.
Pillay said the collaboration with Zando was the logical next phase for Pick n Clothing which has fast built a reputation for offering affordable and accessible brands that are on-trend and made with quality materials.
“We are proud to offer savvy and fashion-forward customers everyday essential wear that makes it easy to update their wardrobes whenever they want and helps them keep up with the latest trends without breaking the bank,” he said.
Zando.co.za was established in 2012 and has since become one of South Africa’s biggest online fashion platforms. It forms part of the Jumia Group, Africa’s leading e-commerce platform.
Zando CEO Grant Brown said: “By entering into a partnership with Pick n Pay Clothing, we are extending value to our customers by increasing the assortment on our platform. Having Pick n Pay Clothing on board provides our shoppers with access to the latest trends at affordable prices, which we are excited about.”
Pick n Pay Clothing has become acknowledged as a progressive brand, recently launching its second instalment of limited-edition designer wear collections in collaboration with young emerging SA designers, mentored by veteran SA fashion designer, Gavin Rajah.
By Ross Jenvey, founder and general partner at Kingson Capital
There can be no question that Covid-19 has changed the way the world operates. Some trends are temporary, and some are more permanent, with the common question nowadays being: what will the new normal look like? As investors in early-stage technology companies, we at Kingson Capital are trying to establish what trends are likely to stick around long term after lockdown truly ends and identify the right companies to invest into that will benefit.
We believe that e-commerce will permanently benefit from people wanting to, or being forced to, socially distance themselves. One of the sub-sectors in this space is online grocery shopping. Adoption risk is common in most early stage companies, where new technology is built to change the way things are done, but people are often resistant to adopt the change. However, once forced to try something different, as many people have been in the last six months, the inertia is broken, and they often refuse to go back to the way they did things before.
Data released by Pitchbook on the US online grocery market shows that the early stages of lockdown in 2020 allowed grocery sales to regain some of the market share it had lost against restaurants and take-aways. More sophisticated technology, coupled with a slew of online grocery shopping options offered by stores and independent tech companies, have seen global online grocery delivery & pickup increase from $1.2bn in August 2019 to $6.6bn in May 2020, a 450% increase in just nine months.
Pitchbook Research furthermore predicts that in the US, online grocery shopping is going to grow from 4.9% of total grocery spend in 2019 to 11.6% by 2025, a 2.4x increase in wallet-share. No matter how you look at it, this represents significant growth. The poster-child of the online grocery shopping industry in the US is Instacart, which raised $225m in a VC-funded round in June 2020, ballooning its valuation from $7.9bn in late-2018 to $13.7bn. Delivery Hero is a similar company, listed in Germany, and in the just over nine months to mid-September 2020, its share price has increased 28% (to a valuation of €18.0bn) as investors continue to take a positive view on this sector.
In South Africa, we are seeing equally positive developments. The main local players – OneCart, Checkers 60/60, Bottles, Quench and Zulzi – have all completed or embarked on funding rounds in 2020 led by JSE-listed companies. The main differentiation between these players is based on multiple versus single retail platforms that a customer can choose from. We are also aware that several of these players have seen anywhere between 200-500% growth in their daily orders since lockdown was implemented in March 2020. Google search analytics has shown that after an initial surge, the reduction of lockdown restrictions in South Africa has correlated with a reduction in online searches for “Online Grocery and Delivery services”. However, that search is still roughly twice as popular as pre-lockdown levels, and the growth in order volumes referred to above talks to the stickiness we would expect, as people become repeat customers. This is the kind of growth that usually attracts competition, and one place we foresee it coming from will be UberEats, after Uber bought the Mexican grocery delivery app business, Cornershop, in October 2019. New apps will also likely spring up.
Research released by the South African Council of Shopping Centres in May 2020 posted an expectation that retail sales will be down as much as 15% from current levels, and there will be slow recovery in shopping centre activity as GDP and employment both contract. Their survey revealed that 22% of respondents were not comfortable with visiting shopping centres and preferred online shopping, and 32% said they were regular online shoppers. This will likely accelerate the trend towards e-Commerce, as retailers try to protect their market share by pushing into this space, to the benefit of the incumbent tech solutions in the market. Interestingly, the major South African retailers such as Woolworths, Pick n Pay, Checkers and MassMart have all recently partnered with or acquired e-Commerce on-demand service providers. The ultimate winners will be the providers that can win consumer trust with consistent excellence in fulfilment and on-time delivery percentages.
Online grocery shopping is likely to be one of those sticky trends which will benefit greatly from the new way the world will work post-lockdown. Pitchbook analysts seem to think this will happen globally, and we think that South Africa will show equally exciting growth, even though we have traditionally been late adopters of e-Commerce. It’s also a sector that is creating jobs, since the shoppers and drivers employed now in this industry are new jobs, and the low skill requirements of the jobs is important in a country like South Africa. Necessity often brings about change, and consumers clearly need to operate differently in the new world they will find themselves in.”
By Mfuneko Toyana and Nqobile Dludla for IOL
South Africa’s e-commerce giant Takealot expects the nationwide lockdown to blow a $20-million hole in its revenues, the chief executive said on Tuesday, but is hoping the government will relax rules on online sales to limit the damage.
President Cyril Ramaphosa announced a three-week lockdown on March 26, extending it by a further two weeks last Thursday, in a bid to contain the spread of COVID-19 in the country which has already seen 2 272 people infected and 27 deaths.
The Takealot business is set to take a hit of around R350-million ($20-million) in revenues, its chief executive Kim Reid told Reuters in an interview.
Takealot, owned by Africa’s most valuable company Naspers Ltd, has seen sales plummet since the lockdown began, leaving the company in “distress,” Reid said.
Under lockdown regulations that have drawn criticism from businesses and consumers, the state has banned in-store and online sales of clothing, electronics, freshly prepared food, tobacco and alcohol, and anything else government considers non-essential.
That has seen thousands of bars, restaurants and takeaway outlets close, leaving only grocery stores and pharmacies open for business and bringing the already ailing economy to a halt.
“Takealot is doing around 15% of the sales we’d normally do,” said Reid, CEO of the Takealot group which also includes food delivery service MrD Food and online clothes seller Superbalist.
The clothes and shoes selling unit had been completely shut while the food-hailing service was at around 2% capacity, mainly delivering medicines and certain foods through recently struck deals with pharma-chain MediRite and petrol station forecourts.
Takealot’s parent Naspers had said last week that many of its divisions were hurt due to the lockdown in various countries though it was too early to estimate the extent of damage.
Online retailing in South Africa is still in its infancy by global standards, accounting for 1.4% of total retail spending according to Visa.
However in recent years bricks-and-mortar retailers have been pouring money into a pivot to online shopping in a bid to adapt to the anticipated migration to e-commerce as data prices fall and the availability of cheap smart phones grows.
Reid said he was hoping the government would follow the model of China, United States and United Kingdom and allow the online retailer to sell non-essential items as “contact-less” deliveries would improve social distancing.
“If you look at the world right now, both food delivery and e-commerce has continued without any restrictions. There is every opportunity for us to operate in a contactless environment to increase social distancing in the country,” Reid said.
For the first time since the dawn of e-commerce in South Africa, online retail in the country will reach 1% of overall retail during 2016. This is the most significant finding of the Online Retail in South Africa 2016 report, released today by World Wide Worx.
The report shows that online retail continues to grow at a high rate in South Africa, having maintained a growth rate of above 20% since the turn of the century. In 2015, the rate of growth was 26%, taking online retail to the R7,5-billion mark. While the rate is expected to fall a little in 2016, to 20%, growth in Rand terms is expected to remain the same as in 2015, taking the total to above R9-billion.
“While 1% represents a very small proportion of overall retail, it is also a psychological barrier for investment in ecommerce initiatives by physical retailers,” says Arthur Goldstuck, managing director of World Wide Worx and principal analyst for the online retail survey.
“The number also masks the extent to which a number of major retailers have exceeded the 1% online mark by a substantial margin, compared to the vast majority that are not yet close to this mark, if they have an ecommerce presence at all.
Goldstuck points out that online retail in South Africa is often characterised as being undeveloped, behind the curve and lagging behind Western markets.
“Even retailers themselves use this kind of terminology. However, this often also results in an underestimation of the healthy growth rate of online retail in this country.”
However, it should be borne in mind that much of this growth is a result of an increase in the number of experienced Internet users in South Africa who are ready to transact online, rather than the retailers themselves getting it right and convincing shoppers to spend more online.
Forecasts by World Wide Worx for the next five years, from 2016 to 2020, show online retail sales almost exactly doubling over this period.
While this may seem significant, enthusiasm should be tempered by the awareness that the range of business models employed by South African online retailers is still somewhat conventional. This suggests that South African ecommerce has not attained the sophistication of major Western markets, where every category of product is characterised by a wide range of business models.
The report includes data from the Target Group Index (TGI) survey conducted by Ask Afrika, the largest market research organisation in Africa. World Wide Worx collaborates with Ask Afrika in the structuring of e-commerce, digital and electronics components of TGI, which comprises 15 000 interviews across a vast range of consumer topics and behaviours.
According to this data, the total number of online shoppers in SA at the beginning of 2015 was 3,225-million. This represents 60,8% of the Internet user base that World Wide Worx has established is ready to shop online. The balance comprises those who have the propensity to shop online but have not yet been persuaded by online retailers to convert this propensity into actual shopping activity.
“In other words, the online retailers have not yet found the full range of triggers needed to convert propensity for behaviour into actual behaviour,” says Goldstuck. “The trigger is to provide what we call an Undeniable Value Proposition, which is an elaborate way of saying that they need to make the online purchase decision a ‘no-brainer’.
“South African ecommerce is relatively conventional, and has not see the level of innovation brought to bear on most product categories in major Western markets. Along with limited activity in other areas, this indicates that there is tremendous potential in this market for new business models and even underexposed product categories.”