Rival retailers are using Takealot’s tech
· Citizen
Major listed retailers, including Mr Price, Woolworths and Pepkor, are leveraging Takealot’s market-leading logistics infrastructure to help run their own e-commerce operations, including distribution.
This division, Takealot Fulfilment Services (TFS), is its newest and helped the group report a full-year trading profit (R171 million) for the first time. The group is also cash flow positive.
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Takealot Fulfilment Services performance
TFS saw revenue almost double (+93.5%) in the year to 31 March at what would be significantly better margins than the core e-commerce unit (Takealot.com).
The group, owned by Naspers, would not disclose margins for its three units (the third is Mr D) but confirmed that all three are profitable.
CEO Frederik Zietsman hinted that the core business operated at a margin of 1% and acknowledged that it needs “to improve that”. In the last year, it expanded its gross margin by 1.5 percentage points.
With TFS, the group is effectively reselling existing logistics capacity that it already owns.
Takealot’s courier services
It sells courier services, on-demand delivery, warehousing and fulfilment, as well as global freight forwarding to more than 3 300 customers.
Many of these are small businesses trading on its marketplace platform. More than half of the largest marketplace sellers use TFS. Because this capacity already exists, a not-insignificant chunk of TFS’s revenue would drop straight to the bottom line.
CFO Tessa Ackermann says TFS “is the one to watch” in the coming year and this bullishness is due to the “compounding financial revenue impacts that it will have on this group in years to come”.
TakealotMore
Its TakealotMore subscription service, which offers free deliveries for plans which cost either R39 or R99 a month, has helped drive top-line growth as well as profitability.
Member numbers grew by 74% in FY 2026 and it says it delivered around R700 million in savings to them.
Zietsman describes the launch of More as an “inflection point” and adds that these subscribers “make up more than 27% of the base” of Takealot.com.
‘Billion-dollar’ business
In the year, the platform grew gross merchandise value (GMV, or total sales volume) by 15%, with revenue growing by 17%.
Marketplace, which enables third-party sellers to trade on the platform, accounts for 60% of sales and now has 15 000 active sellers.
Over 60 million orders were processed by the group in the financial year and Zietsman says 35% of orders on Takealot.com are delivered on the same day or the next.
It has a catalogue of 800 000 products that can be delivered “today and tomorrow” which is “by far the biggest” in the country.
The core unit reported revenue of R14.8 billion, which comprises 84% of group revenue (R17.7 billion). Zietsman says this means the group is a “$1 billion revenue business”.
Helping national players grow
After the success of its partnership with Pick n Pay, where the retailer offers on-demand groceries in the Mr D app, the unit has onboarded a handful of other national retailers to extend their reach.
These include Absolute Pets (owned by Woolworths), Wellness Warehouse, Toy Kingdom, Nespresso and Frozen for You.
Grocery orders on Mr D (i.e. non-takeaway food) grew by 38% in the year, far outstripping overall sales growth (GMV) of 12.6%.
Going forward, it sees this unit focusing on the ‘hyper-local’ space.
‘Just the beginning’
Zietsman is understandably optimistic. He says the digital economy is just starting in South Africa.
Citing the experience in other developing markets such as India, Brazil and Turkey, he adds that the SA market “is going to double in the next five years”. Currently, e-commerce penetration is at approximately 10%, and the group commands a sizeable share of that, with 6.2 million active customers.
So far, it has held its own given the competitive threats posed by global e-commerce players such as Temu and Shein (both Chinese) as well as Amazon.
He says there has been a “surge of competition” in the last 18 to 24 months and that this is not unique to SA. Zietsman admits that as the market has expanded, it has seen “some dilution” but that globally, incumbents in markets tend to “hang on to most of their share” because of the “scale and the velocity they’ve got”.
“We’re very happy for the market to grow because that means more South Africans are shopping online.”
This article was republished from Moneyweb. Read the original here.