Makro owner making big grocery delivery push in South Africa – and it has a key advantage

Massmart has announced that it plans to expand its online marketplace OneCart in the coming months as part of a growing push into the internet space.

The Makro and Game owner acquired an 87.5% stake in on-demand multi-retailer marketplace OneCart in late 2021, with the platform seeing Gross Merchandise Value (GMV) growth of over 200%.

OneCart is unique in the South African space in that it allows customers to shop over 20 product categories from up to 12 leading retailers in one transaction and delivery, hence ‘one cart’.

“Not only does the platform act as an alternative customer channel for some of the country’s most established brands, but it is also the first direct-to-consumer channel for smaller, emerging retailers and SMEs entering the online market,” said Lynton Peters, founder and chief executive of OneCart.

Peters said Massmart and OneCart are now expanding their partnership, and by the end of 2022, OneCart plans to double the number of Massmart stores available on the app. This expansion includes adding the Makro Crown Mines, Carnival and Wonderboom stores to the app this month, whilst selected Builders stores will be added during July.

Currently, OneCart offers customers access to 28 Game and 12 Makro stores – allowing them to shop over 10,000 products across multiple categories, including pantry items, liquor, toys, baby products and small appliances. These orders are delivered within one hour or in a specific time slot chosen by the customer.

“We are really pleased to be able to leverage OneCart for mutual benefit at Massmart through this expansion, given the high priority that Massmart has placed on on-demand eCommerce at Game, Makro and Builders,” said Peters

Peters said that OneCart’s vision is to represent every retailer within a 10km radius of all their customers – ensuring the South African consumer is able to shop for all their needs from their local store or shopping centre on the platform.

“OneCart’s business model is becoming increasingly relevant for both retailers and consumers as convenience and time become new currencies. As retailers seek new growth opportunities and access to new customers, a fast, low-cost online presence is invaluable,” he said.

Peters said that consumers love the additional options that come from using a multi-retailer platform that serves as a one-stop-shop, without the hassle of having to download multiple, stand-alone apps.

“A typical OneCart order could easily involve a diverse product selection that includes your weekly or monthly groceries, a case of wine or beer, a new drill for that spontaneous DIY project, beauty products, and nappies and baby food,” he said.

Competition

OneCart faces stiff competition from several other delivery services in South Africa that have already established a strong foothold.

Shoprite and Checkers pioneered the on-demand delivery space during the Covid-19 pandemic and lockdown, and currently take up 75% of the market share in this segment.

Woolworths, meanwhile, is also increasing its presence in the online and app-delivery space by expanding its Woolies Dash services to more stores and regions in South Africa.

A 2022 strategy document from Pick n Pay outlined the importance of the burgeoning market, noting that while online grocery sales in South Africa are still in the early stages of growth, this segment is expanding rapidly.

Online shopping penetration in South Africa is at approximately 1.1% but is expected to more than double to 2.6% over the next five years, it said.

While the figure appears small, with South Africa’s entire grocery retail market projected to reach R855 billion over the same period, this represents over R22 billion worth of sales that all major retailers will want a piece of.


Read: Online shopping shootout: Woolworths vs Pick ‘n Pay vs Checkers

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Makro owner making big grocery delivery push in South Africa – and it has a key advantage