Takealot bets local scale can hold Amazon at bay - Frederik Zietsman — Takealot Group CEO Frederik Zietsman

Takealot Group is not treating Amazon’s arrival in South Africa as a threat to be survived so much as a contest just getting under way.

“We’ve studied enough global scenarios to realise that with the launch of [Amazon Prime], it’s not the end of the game, it’s the start of the game,” Takealot Group CEO Frederik Zietsman told journalists on Tuesday at an event in Johannesburg.

Citing overseas local champions such as Mercado Libre in South America, Zietsman expressed confidence in Takealot’s position against rivals including Shein, Temu and now Amazon. “We are a local player, we understand the market better. We have better data and more agility,” he said. “I find a lot of optimism in our ability to compete.”

A day after parent company Naspers published its annual results, Zietsman used the media event to lean on the argument that being South African is the e-commerce group’s sharpest weapon. The group had reached its first full-year profit in 15 years of trading, a milestone he framed as bigger than the business itself. “This is a South African success story,” he said, returning repeatedly to the idea that the group’s fortunes are bound up with the country’s.

‘We welcome competition’

The pressure has come from several directions at once. Chinese players Shein and Temu have flooded the local market with low-priced goods, while Amazon, which opened its South African store in May 2024, launched its Prime subscription locally on 3 June and ran its first South African Prime Day event last week.

Asked about the trio, Zietsman cast the influx as validation rather than danger. “Over the last 18, maybe 24 months, we’ve seen a huge surge of competition, whether it’s offshore or onshore,” he said. He argued that incumbents in comparable markets had held the bulk of their share as rivals arrived, and that Takealot had given up only a little ground.

Read: Amazon Prime launched in South Africa

A growing market, he said, suits the incumbent. “We’re very happy for the market to grow because that means more South Africans are shopping online, and the fact is today the majority of South Africans have not.” On Amazon specifically: “We welcome competition. It makes us sharp.”

Group revenue rose 18% to R17.7-billion, crossing the US$1-billion mark. Gross merchandise value (GMV), the total value of goods sold across the platforms, climbed more than 14%. The group swung to a record adjusted operating profit (adjusted Ebit) of R171-million from a R213.8-million loss the year before, a turnaround of about R385-million, while adjusted Ebitda (earnings before interest, tax, depreciation and amortisation) rose 60%.

“The headline is simple and historic: this is the ecosystem working, this is the ecosystem winning,” chief financial officer Tessa Ackermann said. She was candid about how thin margins remain. “Nobody wants a 1% operating margin, we need to improve that,” she said, but insisted the profit was durable because it came from operating cash rather than accounting gains. “This is not just some one-off forex accounting adjustment that pulled these profits. This is real, real cash.”

Takealot.com, still the “mothership”, remained the biggest contributor, with revenue up 17%, gross merchandising value up 15% and orders up 18%. Ackermann said the platform swung to an adjusted R85-million profit from a R297-million loss, helped by retail media revenue up 37%, a 1.5% rise in average margin, cost discipline and a focus on profitable orders. The group processed more than 60 million orders over the year, which Zietsman said came without denting service, with the customer net promoter score at 72.

The ecosystem pitch

The strategic core was what Zietsman called the largest e-commerce ecosystem in Africa, spanning 6.2 million active customers, the Takealot.com retail platform, the Mr D delivery app and the TakealotMore subscription programme.

Management leaned on TakealotMore as a direct counter to Prime, stressing that at R39 or R99/month it spans multiple retailers. “This is the only multi-retailer subscription programme in the country,” Zietsman said. “Any other one boxes you into, okay, you have to deal with me.” Beyond Takealot.com and Mr D Food, it spans retailers including Pick n Pay, Wellness Warehouse, Absolute Pets and Toy Kingdom. The group said active membership grew 74% year on year, lifting member GMV 193.5%, and that the programme saved customers nearly R700-million and “already carries a quarter of everything we sell”.

Mr D, recast from a food app into a “hyperlocal speed powerhouse”, grew revenue 11.5% and GMV 12.6% and remained profitable, with grocery volumes surging 38% on a Pick n Pay tie-up and 60-minute “TakealotNow” deliveries.

Both executives singled out Takealot Fulfilment Solutions (TFS), the logistics arm Naspers plans to scale as a standalone revenue stream in FY2027. Its revenue grew 93.5%, driven by distribution work for retailers such as Superbalist and the Ares Group, and Ackermann called it “the one to watch”. The group said TFS now handles fulfilment for top-tier JSE-listed retailers.

For all the optimism on stage, Naspers has stayed guarded, however. Even after the stronger year, its board declined to reverse the R5.9-billion impairment booked against the business in 2024, saying the improvement “does not yet justify” it. In valuing the business, Naspers applied discount rates of between 17% and 21%, at the higher end of its range, reflecting forecast uncertainty.