By: Natasha Archary
Mudiwa Gavaza, business writer for the Business Day and Financial Mail joins Gugulethu Mfuphi on Kaya Biz to discuss Takelot’s massive R252 million loss.
The South African online retailer reports the staggering loss after the previous year’s R400 million loss.
To break down Takealot’s loss, Gavaza made a comparison between US e-commerce company Amazon, noting a decade of staggering back-to-back losses before any signs of growth were shown.
“The first decade after Amazon launched, between 1997 to around 2010, the company went through a period where they reported a number of mulit-million dollar losses.
This is exactly the phase that Takealot finds itself currently.
They are an e-commerce business, they make a lot of money, they’re the biggest e-commerce player in South Africa but because they are still investing a lot into that growth, think the warehouses, think about the delivery infrastructure, think about the technology.
Because they are still pumping into these areas, they’ve had to ride out a lot of losses.”
According to Takealot owner, Naspers, reaching a normal consumer behaviour post-pandemic has proven challenging. This coupled with interest rates, high inflation and international competition particularly with Temu and Shein taking a large chunk of the market has resulted in these major losses.
“Temu and Shein have made inroads in the South African market, and the recent arrival of Amazon will intensify competition further.
Our businesses in South Africa continue to innovate and explore new opportunities, despite the challenging economic conditions affecting consumers.
We are proud of the performance of these businesses, most notably Takealot.com, which has surpassed 10,000 active sellers in its marketplace. We believe that the platform economy is a catalyst for economic growth, innovation, and job creation in South Africa.”
Phuthi Mahanyele-Dabengwa, South Africa CEO, Naspers.
Listen to the conversation on Kaya Biz:
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