South Africa's Takealot grows revenue to fend off Amazon rivalry
FILE PHOTO: The Takealot logo is pictured on a building in Cape Town, South Africa, November 27, 2024. REUTERS/Esa Alexander/File Photo
JOHANNESBURG (Reuters) -South Africa's biggest online retail group Takealot grew its full-year revenue by 15%, with growth supported by investments in logistics, enhanced customer offerings and its subscription service as it faces competition from new market entrant Amazon.
Technology investor Naspers said on Monday that Takealot Group's revenue rose by 15% in local currency to $872 million for the fiscal year ending March 31. Despite this growth, the group posted an adjusted EBIT (earnings before interest and taxes) loss of $13 million.
Takealot.com, the group's general merchandise e-commerce platform and Amazon's direct competitor, saw its gross merchandise value (GMV) increase by 13%, with revenue climbing 17% and order volumes up by 15%.
Takealot also owns on-demand platform Mr D, which offers restaurants, groceries and other shops.
"I think their (Takealot) performance in the last year was ahead of our expectations, actually," Prosus and Naspers Group Chief Financial Officer, Nico Marais told Reuters.
"We did invest in our marketplace elements to improve the business, and we actually saw Amazon moving, probably not at the speed that we originally expected, which was to our benefit. So we are ready to fight off competition."
The battle for online consumer spending intensified throughout 2024, with both global and local players investing heavily to capture market share. Amazon has since expanded its South African service to include non-perishable groceries.
The U.S. online retail giant launched in South Africa in May 2024.
To defend its leading market share, Takealot said it will strengthen its market presence by enhancing itsloyalty programme, TakealotMore, which it hopes will attract and keep existing customers.
"The business will also focus on growth through range extension and key categories while improving unit economics through cost optimisation, particularly delivery costs and stock efficiencies," it added.
The retailer is also investing in artificial intelligence to gain better understanding of its customers, identify trends, personalise marketing campaigns and automate customer experiences.
(Reporting by Nqobile Dludla; Editing by Joe Bavier and Louise Heavens)
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