South African e-commerce business Takealot group lost $22 million (R392 million) in the latest financial year of its parent company, Naspers.
In the tech and multimedia giant’s FY 2023 results, it attributed the hefty loss to slowing consumer demand in a rising inflationary and interest rate environment in South Africa.
It also said rising operational costs impacted profitability due to persistent national load-shedding, escalating fuel costs, and the effect of global supply chain constraints.
With the trading loss more than tripling from the $7 million recorded in FY 2022 and FY 2021, the trading loss margin also increased from 1% to 3%.
The loss came despite a 13% increase in gross merchandise value and a 12% jump in revenue. However, these increases only applied when the values were measured in rands.
The rand’s value against the US dollar has weakened from R14.48 on 31 March 2022, the end of Naspers’s previous financial year, to R17.80 on 31 March 2023, the end of its latest financial year.
That means that values expressed in rand terms will be substantially higher for goods with the same value in the US dollar.
In dollar terms, Takealot’s gross merchandise value declined roughly 1% from $1.49 billion to $1.47 billion, while revenue dropped 2% from $827 million to $808 million.
Unlike in its statements in other recent financial years, Naspers no longer mentions the possibility of breakeven for the Takealot group in its results.
The Takealot group consists of three businesses — general online retailer Takealot.com, online clothing store Superbalist, and on-demand takeaway and grocery delivery service Mr D.
When measuring in rand terms — Takealot.com increased its gross merchandise value by 14% year-on-year, Superbalist’s grew 11%, and Mr D’s jumped 11%, when including its recently-launched grocery delivery services.
Naspers did not reveal how the aforementioned values changed in dollar terms.
The company said aggressive pricing from offline retailers contributed to overall gross margin pressure for Superbalist.
Mr D’s revenue also grew by 17%, which Naspers labelled as a strong performance given the tough trading environment during the year.
In the past financial year, it partnered with Pick n Pay to launch an on-demand grocery vertical on its platform.
That helped Mr D record a 4% increase in orders during the period.
The table below summarises the revenue, trading profit/loss, and gross merchandise value recorded in sales across the Takealot group.