Big plans for Sixty60

Shoprite has big plans for its highly successful Checkers Sixty60 on-demand delivery service following the full acquisition of the company responsible for recruiting and managing the platform’s drivers.

South Africa’s biggest grocery retailer bought the remaining 50% stake in Pingo previously held by RTT Logistics, effective 28 October 2024, to gain full ownership over critical last-mile logistics expertise and associated intellectual property.

Pingo was formed in May 2022 as a 50-50 joint venture between the two firms and has since expanded its services to a variety of businesses.

Pingo’s primary responsibility is the recruitment and management of Sixty60 delivery drivers, a critical part of the service’s success.

Shoprite said that full ownership allows it to take the lead on Pingo’s technology and strategic roadmap — key drivers of Sixty60’s competitive advantage.

“The Checkers Sixty60 offering continues to evolve, with technology playing a pivotal role in enhancing efficiencies, such as streamlining picking processes and dynamically optimising delivery areas,” Shoprite said.

“This acquisition aligns with the group’s vision of becoming Africa’s most profitable omnichannel retailer,” Shoprite said.

“Full ownership enables us to strategically invest in and integrate the service, accelerating the development of advanced technologies essential for delivering a seamless customer experience.”

It is unclear whether Shoprite plans to continue operating Pingo separately or will merge the business into ShopriteX, its digital innovation hub.

While Pingo has been responsible for managing the onboarding and contracting of Sixty60’s drivers, ShopriteX built and continuously develops the mobile app itself.

Sixty60 is currently the number one grocery app in South Africa, with more than 4.5 million downloads.

The service has been an enormous success for Shoprite, with CEO Pieter Engelbrecht recently saying it is “very profitable.”

While the company has not shared Sixty60-specific revenues, Daily Investor estimated it was generating around R10 billion in revenue annually since launching in 2019.

That excludes the nearly R1 billion in annual delivery fees made by Pingo.

The app was recently updated to support deliveries of more than 10,000 larger items from Checkers Hyper stores. These products range from camping and outdoor gear to small appliances, baby products, toys, kitchen and home electronics, gardening and pool equipment.

The Sixty60 product selection was also expanded with premium tech products from Apple, Dyson, Harmon Kardon, Samsung, Smeg, and Thule.

The update required that Checkers expand its fleet to include small vans for transporting items that won’t fit in a motorcycle box.

Its new product segments put Sixty60 in direct competition with large e-commerce players like Takealot, Amazon, and Makro.

Questions about labour practices

Considering Sixty60’s growth and increasing competition from rivals like Pick n Pay Asap, Woolies Dash, and Spar2U, Shoprite’s takeover of Pingo makes a lot of strategic sense.

Shoprite will also have full control over the platform’s recruitment processes, which have recently come under scrutiny,

Pingo has been accused of punishing drivers with temporary suspensions unless they are willing work long hours and of recruiting an unusual proportion of foreign nations.

Speaking at the company’s virtual annual general meeting earlier in November 2024, Shoprite chair Wendy Lucas-Bull recently confirmed that only 23% of Sixty60 drivers were South African.

She said the company struggled to get South Africans but was working hard to improve this.

She also rubbished claims that drivers were underpaid, stating they earned “best-in-class” rates in the industry.

“They earn significantly above the minimum wage by a long way, and they are well-remunerated and have significant benefits attached in terms of funeral policies, insurance and other things like that,” Lucas-Bull said.