Takealot is South Africa’s largest online shopping platform, with over 2 000 employees and sales of around R1 billion per month, according to MyBroadband.
Where Takealot succeeded:
- Takealot’s dominance is due to its logistics – the acquisition of Mr Delivery in 2014 gave the business ownership over its own logistics network through the Takealot Delivery Team division (formerly Mr D Courier).
- Takealot offers unrivalled service levels and support
- Takealot centralised its marketplace logistics, which means shoppers who purchase a product through its platform receive a consistent experience, independent of the seller.
Where Makro falls short:
- Makro is a trusted brand with a national network of stores, exceptional buying power, and established logistics partnerships
- Makro’s logistics fell apart – many online shoppers wait for weeks for their Makro orders to be delivered, and their support channels are a mess
- Makro has a decentralised model which leaves it up to third-party sellers to send packages to shoppers.
By Jamie McKane for MyBroadband
Naspers has released its financial results for the year ended 31 March 2020, showing impressive revenue growth for Takealot and Mr D Food.
“Takealot, South Africa’s number 1 etailer, extended its leadership and grew Gross Merchandise Volume (GMV) 46% year on year in local currency,” Naspers said.
“Takealot’s trading loss reduced by 20% in local currency and would have improved more, but for investment in the promising food delivery business.”
Naspers said this growth was driven partly by improving gross margins and disciplined management of operating costs.
Takealot recorded revenue growth of 28% in local currency, one of the main drivers of which was the marketplace business, which grew GMV by 77% year-over-year.
“Mr D Food, South Africa’s leading food-delivery service, continues to scale as it expands the local market for food delivery,” Naspers said.
Naspers also noted that Takealot was allowed to sell and deliver only essential items in the first phase of the COVID-19 lockdown, and Mr D Food was unable to operate while takeaway restaurants were closed.
Surge in demand
The reopening of e-commerce under the national lockdown has resulted in a surge in demand for online shopping.
This, in turn, has led to Takealot and other online retailers being flooded with orders which has resulted in significant shipping delays for many products.
A source close to Takealot told MyBroadband the company is now generating close to R1 billion in sales per month – around double their usual volumes.
Takealot did not confirm these numbers when it was asked for comment, but other e-commerce players also told MyBroadband their sales have more than doubled in recent weeks.
Many other online shops have increased their expected delivery times by over a week to address logistics bottlenecks.
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.
By Jamie McKane for MyBroadband
Takealot has confirmed that it will open a new customer centre in Johannesburg.
This follows a report by TechCentral that the online retailer was considering opening a new facility on the N1 highway in Midrand, situated on the New Road bridge.
A distribution centre at this location would cater to customers in both Johannesburg and Pretoria, it stated.
Takealot has an existing customer centre in Cape Town for customer collections, but only a distribution centre in Johannesburg – where customers cannot pick up orders.
Speaking in an interview with MyBroadband, Takealot CEO Kim Reid confirmed they will open a new customer centre in Johannesburg where buyers can pick up purchases.
He said that Takealot will announce more information about the customer centre in 2019.
“We are busy with that, and will be able to provide more details next year,” said Reid.
He added that customers can also expect to benefit from Superbalist’s Click + Collect locations in the near future.
“What people can expect next year, is that we have rolled out 23 Click + Collect points for Superbalist and we will make those live [for Takealot deliveries],” Reid said.
The Advertising Standards Authority of South Africa (ASA) has found Takealot guilty of selling products at higher prices than what it advertises the goods for.
In a recent sponsored Facebook promotion, Takealot advertised DKNY perfume at R369 – a saving of 62% on the normal price.
When a consumer tried to purchase this product, however, they had to pay over R200 more than the advertised price.
A complaint was lodged with the ASA regarding this practice after Takealot told the client it was “not responsible for advertising appearing on third-party platforms”.
According to the complainant, Takealot told her “its terms and conditions exempt it from liability emanating from its own advertising”.
Takealot responded to the complaint, stating it is not an ASA member and that the organisation’s rulings are therefore not binding to it.
The online retailer did acknowledge that this was the third complaint of this type brought to the ASA.
It explained there “may be lags in bringing the pricing of third-party advertisers in line with price changes”.
“The product on special had sold out when the complainant claimed the deal, but the advertising had not been changed,” said Takealot.
The ASA rejected Takealot’s argument that it was not responsible for advertisements from third-party advertisers.
“If Takealot uses third-party advertisers, then it must ensure that checks and balances are in place that such advertisers only display correct information,” said the ASA.
“The reality is that Takealot benefits from the traffic flow to its website and it must take responsibility for the actions of the third-party advertiser.”
The ASA subsequently rejected Takealot’s submission that its advertising is not misleading.
It said consumers are led to believe that advertised products at the discounted rates are available on Takealot, which they are not.
The complaint that Takealot’s advertisement promising a discounted price was misleading was upheld, and it advised the company not to repeat this advertising.
They promised the glitch would not steal Christmas for online shoppers. They did not deliver.
As Black Friday neared, online retailers claimed they were ready to fend off system overloads and crashes when thousands of shoppers look for bargains.
Last year shoppers using Takealot.com ran into problems in the checkout process. This year the company advertised sales of up to 80% off for weeks in advance, while it said it had prepared for five times the average payday traffic.
However, the message greeting many shoppers trying to login after midnight disputed that claim.
Takealot sent out tweets apologising for the downtime: “The @TAKEALOT website and apps are temporarily down due to overwhelming volumes. We’re working hard to resolve the issue and we hope to have the site operational as soon as possible.”
Of course, users were quick to jump online to share their frustrations – often with memes.
For the majority of Black Friday, users who got onto the site were shown this message:
Takealot wasn’t the only online retailer to suffer, with users reporting that several other retailers had crashed at one time or another after midnight. While some have since come back online, others are still struggling. Another of the worst affected was Superbalist.
By Times Live
Online retailer Takealot says that its 2017 Black Friday sale will be the biggest its ever had, with almost every product category on the site expected to host sales.
According to CEO, Kim Reid, over 15,000 products will be discounted starting on 24 November, with the majority seeing up 60% off the normal price tag, and some prices going as low as 70% and 80% off.
The retailer has dubbed its Black Friday weekend sale as the Blue Dot Sale, which will run for five days: from Black Friday on 24 November, through the weekend to Cyber Monday on 27 November. The retailer said it will then follow up with Takealot Tuesday on the 28th.
Noting a big rise in the number of mobile users, Reid said that Takealot would start with Black Friday deals earlier – from 20 November – with app-only exclusive deals.
Despite the struggling economy, and the tough year seen in 2017, Reid said that the company has not seen much of a slowdown during the year, and is only expecting volumes to increase over Black Friday and into the festive period.
The group said it expects volumes to increase by 50% compared to 2016, where sales reached R56 million. Black Friday has seen enormous growth in popularity in SA – 2016’s sales were up from R17 million in 2015, and way up from R1 million in sales in 2011 when it held its first Black Friday sale, it said.
According to Reid, technology products, fragrances and toys traditionally perform well on Black Friday, but the retailer is anticipating a spike across all categories.
“While the big ticket items like games consoles and TVs are popular as pre-Christmas buys, our highest volume sales on Black Friday are often driven by everyday consumables, like nappies, dog food and coffee,” he said.
In 2016, Takealot experienced some technical issues with the site being overloaded by eager shoppers, and transactions failing due to payment gateways (especially 3D Secure) buckling under the unprecedented transaction volumes.
South Africa’s banks have already said that they have been upgrading infrastructure, and have technical teams on standby to handle the expected spike. Takealot, meanwhile, says it is preparing for five times the traffic seen on a typical payday.
“Our checkout process ran into problems on last year’s Black Friday because the banks’ payment gateway fell over from the surge of online shoppers across the country. The combination of all the retailers running Black Friday sales meant that they simply couldn’t handle the volume of transactions,” Reid said.
For 2017, he said that the company is continuously making changes to its systems and processes to ensure it doesn’t leave customers disappointed.
“We’ve bolstered resources across the business – from our engineers and developers to customer service shopping assistants, warehouse staff to Takealot Delivery Team drivers, to manage the increase in volume,” he said.
Source: Business Tech