Takealot edges closer to 2m customers

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 13 Nov 2019
Kim Reid, CEO and founder of Takealot.
Kim Reid, CEO and founder of Takealot.

Local online retailer Takealot has notched up over 1.8 million customers, as more South Africans become comfortable with shopping online.

Launched in June 2011, the shopping site has rapidly evolved over the years, opening warehouses throughout the country, expanding its selection to over 21 departments, adding a third-party sellers’ marketplace, and most recently, adding pickup points across the country.

“Takealot currently has between 1.8 million and 1.9 million customers on the platform,” says Kim Reid, CEO and founder of Takealot.

“We believe customer experience plays an important role, from the moment a customer arrives on the Web site or app and places an order, to when it arrives at the delivery door.

“We are continuously trying to innovate and offer better products and services. Among the ways we are doing this, is by recently expanding our collection points to 40 throughout the country, and increasing the number of small businesses registered in the marketplace to 2 600.”

In May, the retailer launched Takealot Pickup Points in East London, Port Elizabeth, Johannesburg and Cape Town.

Reid says the collection points have been extremely busy, as some customers realise at the last minute that they will not be at their chosen delivery place and often push the delivery to their nearest collection point.

“We spend a lot of time trying to make the delivery process seamless for our customers. Today, we deliver 85% of orders through our internal delivery team; the rest are done through courier companies.”

SA’s fastest-growing e-commerce site was established a year after the successful acquisition of an existing e-commerce business called Take2 by US-based investment firm, Tiger Global Management, in October 2010.

In 2014, the business received a $100 million investment from Tiger Global. This was quickly followed by the purchase of Mr Delivery, which gave the business ownership over its own logistics network through the Takealot Delivery Team division.

Takealot, according Reid, has big plans to expand its third-party sellers’ marketplace, which currently accounts for 38% of the gross merchandise value sold through the platform.

The marketplace has an array of small to large businesses, with one large retailer currently trialling the platform.

“While we will always need the retail part of the business in order to grow the marketplace, our mission is to have the marketplace grow to over 50% of the overall business. The marketplace allows small to large businesses onto the platform to take advantage of our market to sell their goods,” he explains.

“We are building a lot of technology tools and services onto the marketplace to allow our 2 600 sellers to be able to manage their stock and market their business to boost growth. Our sellers keep their stock at our warehouse and use our delivery services, and we try to charge them the cheapest fee. They also pay a take-rate of 7% to 8% of the item price.”

Discussing the platform’s preparedness for Black Friday on 29 November, Reid highlights the importance of getting ready for scale.

“Black Friday happens to us whether we like it or not, and so it’s important to get ready for scale. The problem we face is that we have to cater for triple the amount of sales that we typically have on an ordinary day. For instance, last year we went from making around R40 million worth of sales a day to R190 million.

“So it’s a mammoth task, but I think we are ready for Black Friday as far as the technology and payment facility is concerned. It’s also about making the deliveries at the right time,” he concludes.