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Takealot doubles down on expansion amid Amazon pressure

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 21 May 2024
Takealot.com supports over 12 000 small businesses through its Takealot Marketplace platform.
Takealot.com supports over 12 000 small businesses through its Takealot Marketplace platform.

Takealot.com is planning to expand its dark stores across South Africa, as the country’s biggest e-tailer scales its operations to gain a larger share of the local online shopping market.

The Naspers-owned e-commerce group − which comprises SA’s biggest e-tailer Takealot.com, Mr D Food and Superbalist − says it has reached four million customers since inception in 2011.

Over the years, it has grown to support over 12 000 small businesses through its Takealot Marketplace platform, and has expanded its nationwide delivery and collection hubs to over 100 pickup points.

During a recent interview with ITWeb, Takealot Group CEO Frederik Zietsman explained the company is on a path to aggressively grow the business, with a focus on warehouse expansion across SA.

It is also looking to increase the number of personal shoppers, dark stores and marketplace sellers, while further optimising its online shopping processes, he stated.

“One exciting initiative that we are doing, that people may not know about, is the concept of a Takealot dark store or a mini warehouse. That might be the future, where we have a dark store or a mini warehouse in the township. We have one in Johannesburg, and we are opening one in Pretoria and another one in Cape Town,” noted Zietsman.

According to Wikipedia, a dark store is a warehouse that can either be used to facilitate a click-and-collect service, where a customer collects an item they have ordered online, or as an order fulfilment platform for online sales.

Uber Eats and AliExpress are among the online shopping apps that have set up dark stores in SA.

Takealot is planning to generate 20 000 jobs by 2028 through its Takealot Township Economy Initiative. This encompasses several strategic pillars to foster sustainable job creation and support historically-disadvantaged businesses across 20 Gauteng townships.

Frederik Zietsman, Takealot Group CEO.
Frederik Zietsman, Takealot Group CEO.

SA’s biggest e-tailer has been under pressure for months leading to Amazon’s arrival in SA, as the global shopping site will provide strong competition for Takealot, which has for years been enjoying the lion’s share of the local e-commerce market.

Market watchers believe the arrival of the US giant in SA will force local e-commerce players to consider where their value proposition lies, and how they can maintain uniqueness and authenticity around their business, so their offering continues to resonate with consumers.

Takealot has been ramping up its service and extended its product categories to include a wider variety of clothing, shoes and groceries, to better compete with rivals.

Takealot recently introduced TakealotMORE, an Amazon-like subscription service, offering customers exclusive benefits, including unlimited deliveries and a variety of collection options, to enhance their shopping experience.

Personal shopper focus

Takealot currently has two 40 000 square metre warehouses or distribution centres in Cape Town, two in Johannesburg, and is building a fifth warehouse in KwaZulu-Natal (KZN), which is planned to start operating in September, Zietsman noted.

The first phase of the KZN Takealot distribution centre development encompasses approximately 43 000 square metres, with an additional 20 000 square metres reserved for future expansion.

The new facility will also have same-day and next-day delivery and collect capabilities for Takealot shoppers living in and around the KZN region.

Takealot started with just one category – selling books and DVDs on the platform. Today, it has grown to offer more than one million products, as more South Africans take to the platform for their everyday needs.

Nationally, Takealot on-boards in excess of 400 sellers or small businesses every month and continues to prioritise supporting entrepreneurs on its marketplace to grow their businesses, according to Zietsman.

“The marketplace empowers small businesses by providing a significant advantage in market access and removing entry barriers. If we are focusing on offering products that are made by South Africans, for South Africans, that means we are stimulating local entrepreneurship, more so than importing commoditised products that are imported into the country. We are trying to see how well we can work with government to not sacrifice local industrialisation.”

The company is also expanding the number of personal shoppers who work on each order, as part of its strategy to fast-track delivery and last-mile fulfilment.

“We already have 300 personal shoppers and we are adding more per month to our programme. We are focusing more on this and recruiting more each month − this will enable us to get more people quicker, so I think that will help us get to 10 000 personal shoppers in the first few years.”

Going forward, the e-tailer is looking to bring stronger alignment between its e-commerce platform and Mr D food delivery service, and ramping up its processes.

“There is always a room for improvement. I think that is why we've got such a capable and competent team that helps us optimise our processes year-on-year, week-on-week. We are effectively a retailer, and a retailer has very low margins, so we need to always optimise our processes to improve efficiency,” he concludes.

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