Takealot feels the pain from Temu and Amazon

Naspers has released its financial results for the half-year ended 30 September 2024, reporting that Takealot’s growth was slowed by Amazon.co.za and Temu.

Despite that, it reported strong revenue and gross merchandise value (GMV) growth for the period.

“The business continues to face a slow-growing macroeconomic environment and increased competition from new entrants such as Temu and Amazon impacting Takealot group’s growth, which was 11% revenue growth and GMV growth of 11%, excluding Superbalist,” said Naspers.

GMV reached R746 million during the reporting period, up from R654 million during the same period the year before.

Naspers added that Takealot continues gaining market share in general merchandise.

Despite this, Naspers said the e-commerce business focused on defending its market share during the reporting period while adapting to changes in shopping patterns post-load-shedding.

Takealot’s adjusted earnings before interest and tax (aEBIT) dropped from a profit of $1 million for the same period in 2023/24 to a loss of $12 million (R218 million).

Naspers explained that the adjustment removes Superbalist from Takealot’s figures. It sold the online fashion retailer in September.

During Naspers’ last full-year results, Takealot Group CEO Frederik Zietsman said that Superbalist was the only part of the business that was not profitable.

Until September, the Group comprises Takealot.com, Mr D, and Superbalist. Zietsman also revealed that Takealot.com posted its first-ever profit in the fiscal year ended 31 March 2024.

Takealot Group has now swung back to a loss as it invested in its platform during the first half of the financial year. During this period, it also launched TakealotMore and opened a new distribution centre in Durban.

“Recent trends show a meaningful pick-up in growth as the leadership team makes improvements to the business,” said Naspers.

The Takealot Group’s staff complement comprised 17,136 drivers and 7,772 employees as of 30 September 2024.

Takealot launched TakealotMore, which offers free deliveries and collections for orders, among other benefits, in May 2024.

“This groundbreaking subscription service offers millions of South Africans exclusive monthly benefits to eliminate delivery costs and enhance shopping convenience,” Takealot said.

“The subscription service offers fast, free delivery and collect options on Takealot.”

“Mr D has concentrated efforts on sustaining and accelerating the growth of the grocery business,” said Naspers.

Regarding its financial performance, Mr D’s revenue increased by 12%, or $4 million (R73 million), to $58 million (R1.05 billion) during the period.

Naspers said this growth was primarily driven by the grocery businesses, which made up for slow growth in the food delivery space.

“Food delivery recorded GMV growth of 2%, with groceries delivering GMV growth of 109%, resulting in overall GMV growth of 13%. aEBIT doubled from US$1m to US$2m in the period,” said Naspers.