South Africas e-commerce leader, Takealot Group, presented a mixed bag in its recent financials for the year ended March 2024. While the group managed to reduce trading losses to USD 14 M, overall revenue dipped slightly by 2% year-on-year to USD 792 M. This slowdown coincides with a surge in competition, particularly from aggressive international players like Shein and Temu, who have been accused of exploiting loopholes to undercut local retailers.
There was increased competition throughout the year as competitors continued to invest heavily in e-commerce capabilities, Naspers, Takealots parent company, stated in its earnings report. [Global competitors] have made strong inroads into a price-conscious South African market, and new entrants could further intensify competition.
Takealots fashion arm, Superbalist, seems most vulnerable, with the company itself admitting, Superbalists revenue growth has struggled because of the acceleration of international players offering cheap clothing products in South Africa.
The recent arrival of Amazon in South Africa adds another layer of complexity. Though a newcomer, Amazons vast experience in e-commerce poses a significant threat to established players like Takealot.
However, there are bright spots. Mr D, Takealots food delivery platform, achieved a significant milestone by reporting its first-ever profit of USD 3 M, alongside a healthy 16% growth in GMV. Takealot.com, the groups flagship online store, also witnessed a 13% increase in GMV and surpassed the 10,000 active marketplace seller mark. Additionally, Takealot managed to reduce its trading losses by USD 4 M compared to the previous year.
