Takealot vs Amazon vs Temu battles heats up in South Africa

Takealot says it is facing increased competition from Amazon and Temu in South Africa.

In its interim results for the six months ended 30 September 2024, parent company Naspers said that the Takealot Group sold Superbalist, which will accelerate the group’s path to profitability.

The Takealot group business continues to face a slow-growing macroeconomic environment and increased competition from Temu and Amazon.

US giant Amazon launched its online Marketplace in South Africa in May of this year, while Chinese retailer Temu started selling in South Africa in early 2024.

The increased competition impacted the Takealot group’s growth, which was 11% (7% in rand local terms) revenue growth and GMV growth of 11%, excluding Superbalist.

That said, the Takealot group continues to gain market share in general merchandise.

The group recently launched TakealotMore, a subscription loyalty programme that offers a value proposition that should enhance customer loyalty and retention, and Mr D has concentrated efforts
on sustaining and accelerating the growth of the grocery business.

Takealot.com grew GMV by 10% and revenue by 11% (7%).

“The e-commerce business focused on defending market share, adapting to change in shopping patterns post the end of load shedding and opened another distribution centre in Durban in September to increase same-day and next-day deliveries,” said Naspers.

“Recent trends show a meaningful pick-up in growth as the leadership team makes improvements to the business.”

Mr D grew revenue by 12% (8%), reaching US$58 million (R1 billion), excluding M&A, driven mainly by the grocery business, which compensated for the slower growth in food delivery.

Food delivery recorded GMV growth of 2%, with groceries delivering GMV growth of 109%, resulting in overall GMV growth of 13%.

Earnings before interest and taxes doubled from US$1 million (R18 million) to US$2 million (R36 million) in the period.

Group results

“Since his appointment as group chief executive of Naspers and Prosus, Fabricio Bloisi and his team have focused on how we can grow faster, be more profitable, and improve how our ecosystems and people work together,” said the group.

“The strong financial improvements in 1H25 provide shareholders a glimpse of the significant opportunity within Prosus and Naspers.”

The group continued its profitable growth in its core e-commerce businesses, with consolidated revenue growing 15% (24%) to US$3.4 billion.

IFRS operating profits totalled US$107 million compared to an operating loss of US$426 million recorded in the prior period.

Earnings from continuing operations increased to US$2.0 billion from US$1.5 billion in the prior period. Core headline earnings, Naspers’ measure of after-tax operating performance, was US$1.5 billion, an increase of 74% (88%).

Strong improvements in e-commerce and Tencent (the Chinese tech company where Naspers derives most of its wealth) underpin this strong performance.

With these results, the group showed its commitment to delivering profitable growth.

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