Takealot reports R252-million loss

Naspers has released its annual results for the year ended 31 March 2024, reporting a $14 million (R252 million) trading loss for the Takealot Group.

At the same time, it reported that food delivery and logistics operator Mr D reported a profit for the first time.

The company noted that it faced a challenging economic environment and increased competition during the financial year. Despite this, it managed to reduce Takealot.com’s trading losses year-on-year.

The Takealot Group comprises Takealot.com, Mr D, and Superbalist. Combined, the group reported that revenue decreased by 2% year-on-year to $792 million (R14.9 billion), while trading losses dropped by $8 million (R150 million).

“There was increased competition throughout the year as competitors continued to invest heavily in e-commerce capabilities,” said Naspers.

It also noted the threat of Chinese retail importers Temu and Shein.

“Global competitors have made strong inroads into a price-conscious South African market and new entrants could further intensify competition.”

Naspers said Takealot.com’s gross merchandise value (GMV) grew by 13% in rand terms, while trading losses were reduced by $4 million (R75 million) during the financial year.

It also noted that Takealot’s marketplace seller base exceeded 10,000 sellers in March 2024.

Naspers said the Takealot Group’s top priorities for the 2023/24 financial year were improving profitability and managing competition.

It said operating costs increased due to the impact of new warehouses and new hires in the prior year. However, it mitigated the impact by scaling down activities, driving efficiencies, and implementing a hiring freeze.

It also installed diesel tanks at its distribution centres to mitigate the effects of high fuel prices.

Mr D’s GMV grew by 16% over the period and reported a trading profit of $3 million (R56 million) — the delivery platform’s first recorded profit.

“Mr D has built a leading two-sided food-delivery marketplace in South Africa by providing superior service and better restaurant selection to customers, as well as an economically attractive channel to increase sales with minimal incremental cost or effort for restaurants,” said Naspers.

“In addition to the partnership with offline grocer Pick n Pay, Mr D expanded its product categories to include petfood and accessories, gifts and flowers as well as general merchandise, moving to a convenience-delivery model.”

Takealot said Superbalist’s revenue growth has struggled because of the acceleration of international players, like Temu and Shein, offering cheap clothing products in South Africa.

The South African e-commerce giant hasn’t turned a profit since it was founded 15 years ago.

Former Takealot CEO Kim Reid previously said that the company was set to turn its first profit by 2021, after it significantly reduced its losses between 2019 and 2021.

However, things haven’t gone well since. It incurred a loss of $22 million (R407 million) in 2023, up from $7 million (R129 million) in 2022.