Takealot’s big solar plans

Takealot is betting big on solar power and significantly expanding its grid-tied systems at the Johannesburg and Cape Town distribution centres.

The two facilities will offer 1,500 kilowatts at peak (kWp). Its newest facility, which is being built in Durban, KwaZulu-Natal, will add a further 300kWp.

This was revealed in Takealot owner Naspers’ annual results for the year ended 31 March 2024.

The expansion project at Takealot’s main Johannesburg distribution centre will increase the facility’s installed solar capacity from 240kWp to 600kWp.

Its distribution centre in Milnerton, Cape Town, already has a dedicated solar system. While its capacity isn’t specified, the upgrades will bring the figure to 900kWp.

Takealot expects the work at its Johannesburg and Cape Town distribution centres to be completed in the first quarter of the 2024/25 financial year.

The e-commerce giant is also building a new warehouse and distribution centre — The Brickworks — in Durban, KwaZulu-Natal. Investec Property is developing the 388-acre facility.

It expects the new facility to be commissioned and operationalised during the course of the 2024/25 financial year. It will be served by a 300kWp grid-tied solar system.

Takealot said the new facility will also have a rainwater harvesting system for irrigation and toilets. It has committed to using water-saving sanitaryware.

The region has been hit by severe weather in recent years, resulting in extensive flooding damage. This included devastating floods in 2022.

Takealot said its new facility will feature an underground attenuation tank to reduce the impact of flooding during heavy rainfall.

The region also experienced violent protests in July 2021, during which protestors burnt buildings and warehouses.

Takealot’s facility at The Brickworks will be safeguarded by a state-of-the-art security system and on-premises guards.

“A highly skilled security management team has structured operations into various optimal and effective transversal units, while the precinct’s commanding officers have South African Police Service and military experience,” said Investec Property joint CEO David Rosmarin.

Inside Takealot’s Johannesburg distribution centre

The expansion of Takealot’s rooftop solar capacity will reduce its reliance on the national power grid and ensure its facilities remain online during load-shedding.

The latter has been an issue for the e-commerce giant in the past. Naspers blamed load-shedding and high inflation for its $22 million (R392 million) loss in 2022/23.

“The trading environment faced rising fuel costs, higher levels of inflation, staged load-shedding, supply-chain disruptions and rising interest rates,” it said.

It also said load-shedding significantly impacted its food delivery service, Mr D.

The supply of delivered meals contracted as electricity load-shedding restricted restaurant hours of operation,” added Naspers.

While things improved slightly in 2023/24, the Takealot Group has yet to reach profitability. It reported that revenue decreased by 2% year-on-year to $792 million (R14.9 billion), while trading losses dropped by $8 million (R150 million).

The Takealot Group comprises Takealot.com, Mr D, and Superbalist. The former’s gross merchandise value grew by 3%, while trading losses dropped to $4 million (R75 million).

Naspers said operating costs were higher in 2023/24 due to the impact of new warehouses and hires in 2022/23.

However, it said it minimised the impacts 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 had a big year in comparison. Its GMV grew by 16% over the period and reported its first-ever trading profit at $3 million (R56 million).

“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.