SA’s Leading E-Commerce Retailers

BY CHARNDRÉ EMMA KIPPIE

In the midst of a pandemic, South Africa continues to climb world rankings, proving to be a key player in the E-commerce space.

According to the United Nations Conference On Trade And Development (UNCTAD) B2C E-commerce Index 2020, South Africa placed 73rd in world rankings for its E-Commerce market readiness and development, out of 152 economies.

The UNCTAD B2C E-commerce Index zooms in on an economy’s ability to successfully support online shopping. The index carefully considers four key indicators, which are closely aligned to online shopping behaviours and trends, and for which there is wide country coverage. These key factors are: account ownership, consumers using the internet, postal reliability and secure internet servers.

The country’s revenue is set to continue to increase, with new markets gradually emerging, and existing ones exhibiting promising potential for accelerated development in months to come.

Just placing in the upper half of world rankings means we have a long way to go. However, market expansion is well on its way, with Fashion, Toys, Hobby & DIY, and Electronics and Media being the most popular avenues of revenue in South Africa at present.

TAKEALOT

Launched in 2011, Takealot Online Pty, Ltd. has become South Africa’s biggest player in the E-Commerce Market, increasing its revenue by 41% to R3.7-billion, by the end of 2020. Even in the face of a global pandemic, coupled with a nationwide lockdown, the Naspers- owned e-retail group continued to grow, selling only ‘essential goods’ such as toiletries and household supplies for most of the year.

The company’s subsidiaries, Mr D Food and Superbalist, did however experience a slight setback last year, as they were prohibited from trading for a significant period of the financial year. This incurred a trading loss upswing of 36%.

Naspers revealed that the overall business managed to rebound as of late May, which was when trading restrictions were raised, and all three businesses moved beyond their pre-Covid-19 growth rates by the second quarter of 2020.

WOOLWORTHS

In April 2007, Woolworths South Africa launched its innovative Good Business Journey – an initiative geared towards making a difference in eight key areas in their journey towards sustainability. These key areas comprised: Energy, Water, Waste, Sustainable Farming, Ethical Sourcing, Transformation, Social Development and Health and Wellness.

Today, the company is known for providing competitive benefits, fostering good customer relationships, product innovation, and keen adoption of new technology. This is why it has become one of South Africa’s top fashion, food and personal care retailers, surviving the impact of the global pandemic.

Under the wing of its newest CEO, Roy Bagattini, Woolworths witnessed a rapid increase in online sales throughout 2020. During the first half of the year, Woolworths saw online food sales go up by 87.8%. In the second half of 2020, its fashion, beauty and home online divisions saw sales grow by 41.3%.

MAKRO

Operated by Massmart Holdings, Ltd., Makro recorded massive growth in online shopping, for the financial year ended 27 December 2020. With nationally-focused sales, Makro witnessed major shifts in consumer behaviour due to the nation-wide lockdown. These shifts led to a rise in retail customers, while there was a significant decrease in wholesale and commercial sales.

During the lockdown period, Makro joined a partnership with OneCart - South Africa’s premier grocery delivery service - which allowed the company to promise its customers the sale and delivery of over 11 000 grocery items, as well as 124 liquor items. This, in turn, led to the increase of online sales by 40.2%.

BUILDERS

Close rival to Makro, Builders accounts for a significant portion of South Africa’s DIY and hardware e-commerce sales. Operated by Massmart Holdings, Ltd., Builders merchants’ sales stayed consistent as the nation went through fluctuating levels of lockdown throughout the Covid-19 pandemic since the beginning of 2020, as reported by the latest Builders Merchants Building Index (BMBI) report.

Steady growth was captured, backed heavily by three main product streams, namely Timber and Joinery, Landscaping, and Workwear and Safetywear. As of January 2021, Builders sales rose by 20.6%, with Workwear & Safetywear sales rising by 39.1%.

Massmart has revealed that Builders online sales increased by 111%, and that this was due to an improvement of online fulfilment practices. Statistics indicate that indoor retail sales are slowly recovering, however, the demand for online shopping is still expected to increase in coming months.

MR PRICE (MRP)

Mr Price Group is one of South Africa’s most favoured, fastest growing fashion value retailers, also offering homeware, DIY supplies and sportswear through its various divisions. Most recently the company has witnessed an increased demand for DIY products, as a result of many customers developing a keen interest in DIY home projects due to lockdown restrictions.

Between the third and fourth quarter of 2020, Mr Price Home experienced a total sales growth of 11%. The company reported that their customers expressed a need for household merchandise due to the evergrowing remote work trend. This trend is expected to continue well into 2021 and beyond.

In March 2021, Mr Price announced that it had acquired the online homeware retailer known as Yuppiechef. This strategic move is set to strengthen its place in the homeware market and is bound to be a catalyst for new growth opportunities.