South Africa’s largest e-commerce retailer, the Naspers-controlled Takealot group, reported revenue growth of 55% in the last financial year, despite a ban on unfettered e-commerce during the height of the hard lockdown in 2020.
In the year ended 31 March 2021, which included a full 12 months of the Covid-19 pandemic, Naspers reported that Takealot’s revenue rose to US$606-million (R8.7-billion at the time of writing), while trading losses decreased to “near breakeven”.
Gross merchandise value (GMV) traded came in at R16.6-billion, 69% higher than a year ago, thanks to strong growth in Takealot’s third-party offerings, where it manages fulfilment on behalf of other companies. GMV is the total value of goods sold.
“Superbalist, one of South Africa’s leading online fashion destinations, grew GMV 45% in local currency and continued to contribute healthy gross margins,” Naspers said.
“Takealot’s food delivery business, Mr D, also had an excellent year as lockdown conditions shifted consumer demand from restaurant dining to online delivery. As a result, Mr D grew orders 117%, representing 93% growth in revenue year on year.”
The strong financial performance comes despite government’s ham-fisted closure of the economy last year, which included banning the sale of goods deemed “non-essential”.
E-commerce players, including Takealot, were included in the ban on the grounds of what trade & industry minister Ebrahim Patel dubbed “fairness”, but the move was almost universally condemned.
In April 2020, at the height of the restrictions, Takealot CEO Kim Reid called the ban on unfettered e-commerce “incomprehensible”, saying it flew in the face of government’s own commitment to the so-called fourth Industrial Revolution.
Reid said the government was “short-sighted” by not allowing unfettered online shopping, particularly given the platitudes it so often paid to the importance of technology innovation in growing the economy.
The strong growth in Takealot’s sales in the last year reflect the broader adoption of e-commerce in South Africa during the pandemic. A lockdown-fuelled online shopping boom lifted South Africa’s e-commerce sales by 66% last year to more than R30-billion, according to a World Wide Work research report published last month.
World Wide Worx said online sales in South Africa more than doubled in two years to R30.2-billion as consumers became more accustomed to buying goods and services online, particularly after the country was put into lockdown in March 2020 due to Covid-19.
“The most astonishing aspect of this total is that it is more than double the R14.1-billion reached in 2018, in just two years,” said World Wide Worx MD Arthur Goldstuck, principal analyst on the research project, in a statement at the time. “It is also 50% higher than the total forecast for 2020 three years ago, when online retail in South Africa was expected to reach R20-billion.”
The growth came despite a slump in traditional retail last year, brought on by Covid-19 lockdowns and the associated job losses and erosion of the economy. — © 2021 NewsCentral Media