Takealot finally nears profitability as Amazon looms

Takealot Group, the South African e-commerce giant under Naspers ownership, demonstrated robust growth in the six months ending on September 30, showcasing resilience amid anticipation of Amazon’s imminent entry into the local market. The half-year financial results from Naspers and its subsidiary, Prosus, revealed positive trends for Takealot Group, encompassing Takealot.com, Mr D, and online fashion outlet Superbalist.com.

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Despite challenges faced by South African retailers, including high interest rates, inflation, and power outages, Takealot Group reported a 15% year-on-year increase in gross merchandise value (GMV) and a 10% growth in revenue in local currency terms.

Takealot Group CEO Mamongae Mahlare highlighted the accelerating growth in e-commerce within the country. Although the group is not yet profitable at the trading profit level, Mahlare emphasized the solid business health, with Takealot.com’s operations generating more revenue than their costs—a key indicator of momentum toward profitability.

Takealot.com, the market leader in general e-commerce in South Africa, experienced a 15% year-on-year increase in GMV, with its third-party marketplace reaching 10,800 sellers in September, contributing 19% to group sales. Mr D, the food delivery arm, also achieved 15% GMV growth, while Superbalist recorded a 13% increase. Both Mr D and Superbalist are on a trajectory to achieve operational and trading profit at the appropriate stage in their development.

Competitive pressures persist, with Uber Eats introducing store pickups and a rival service, TakealotNow, available on the Mr D app. In the fashion sector, Superbalist faces competition from local and international players like Shein. Despite these challenges, Takealot Group remains resilient.

The weakened rand impacted the group’s first-half performance when reported in US dollars, with a negative impact on GMV. Despite the decrease from $700 million to $711 million in GMV, the weakening rand resulted in the “loss” of $91 million in value. The impending entry of Amazon into the local market adds an additional layer of competition, keeping Takealot Group vigilant and agile in response to evolving market dynamics.