Takealot, South Africa’s leading online retailer, is introducing delivery within an hour for items ranging from phone chargers to toys as it braces for Amazon.com Inc. to enter the country’s e-commerce sector.
The rapid delivery service will initially be offered in parts of Cape Town, where Takealot parent Naspers Ltd. has its headquarters, before expanding more widely, the retailer said in a statement on Wednesday. Products will be shipped until 10 p.m., with no fee charged during the first month.
South Africa is the continent’s most developed economy and has a youthful population, together with one of the largest upper-middle-income markets in the region. It’s potential is drawing increasing attention from retail giants like Walmart Inc. and Amazon, which could roll out online delivery there this year.
Read More: Amazon’s South Africa E-Commerce Debut Welcomed by Market Leader
E-commerce only makes up about 4% of South African retail, which presents a market growth opportunity three to five times bigger than in peer countries, Takealot Chief Executive Officer Mamongae Mahlare said at a Bloomberg event in Johannesburg on Wednesday.
Online retail sales in South Africa grew 30% to 55 billion rand ($2.9 billion) last year, according to a study by World Wide Worx market researcher.
“South Africa is still nowhere in terms of online sales, which means that there’s massive opportunity for growth,” Mahlare said. “If you look at just the nature of our country and what e-commerce does, it’s a great equalizer because whether you’re in an urban or rural area, you all have access to the same products.”
Takealot was founded in 2011 and reported $827 million in revenue in 2022. Its new service will compete with companies that offer fast grocery delivery, including Shoprite Holdings Ltd.’s Sixty60 app.
(Updates with delivery service details in second paragraph.)
