eCommerce battle looming in South Africa

Popular online shopping portal Take2 is re-branding as Takealot with plans to significantly improve the overall experience of shopping online in South Africa.

Takealot CEO Kim Reid explains that the company will focus on a few key areas to ensure that they become the online retailer of choice in South Africa. These key areas are customer service, logistics, competitive pricing and a well designed user interface.

Reid said that Takelot is already stocking their Johannesburg warehouse with products, complementing their growing Cape Town warehouse.

Carrying stock is a key component for Takealot to improve customer service and lower delivery times, and Reid said that Gauteng and Cape Town customers can expect overnight or even same-day delivery for ‘in-stock’ items from August.

Takealot will initially focus on electronics, games, CDs, books and DVDs, with plans to grow their product range by two more categories this year. Takealot will also continue to offer their import service for long-tail items, competing against other similar businesses such as Wantitall.

eCommerce battle looming

Takealot, which currently shows annual growth of between 30% and 40% per year, is planning to increase their annual revenue to R1 billion within the next five years.

In the last financial year Takealot (then Take2) had an annual turnover of R75 million which means that a yearly growth rate over 85% is planned.

Reid added that they would like to increase their South African eCommerce market share to over 50%, which means that they would be the dominant player in the local online shopping market.

Reid said that he expects Kalahari.net – which is currently the dominant online shop in SA – to react to Takealot’s push to boost product ranges and customer service, but that he welcomes the competition.  “Game on,” said Reid.

Kalahari.net is not the only local e-tailer which will be pressed to ensure they keep up with Takealot. All large SA online shopping services such as Wantitall, NetFlorist and Loot, stand to lose out if Takealot succeeds in growing its local market share.

Reid plays down the importance of beating the competition, saying that they focus more in the overall growth of the local eCommerce market to boost revenues. Reid estimates the local eCommerce market will grow significantly over the next few years – from under R1 billion annually to a few billion Rands in a few years’ time.

Scale is key to ensure future growth and being able to stock a large range of items, and what is clear is that Takealot plans to be South Africa’s Amazon.com. With the financial backing of international powerhouse Tiger Global Management, other online shopping sites will be well advised to keep a close eye on Takelot.