Take some more: What the rise of Takealot means for SA’s mass-market retailers

By Simon Anderssen, Head of 22seven Insights

The exponential growth of online retail is not news – it’s a worldwide trend that was only amplified by Covid lockdowns and remote working. In South Africa, most retailers have some sort of online presence, but the king of the one-stop-shop is undeniably Takealot, which has seen significant growth since 2019.

Like Amazon in the US or?JD.com?in China, Takealot competes directly with brick-and-mortar mass-market retailers, many of whom have been slow to self-disrupt their profitable stores with a competitive online offering of their own.?

New market leader?

At 22seven Insights, we have been tracking how 22seven users have been spending at Takealot since 2017. The data is fascinating – or worrying if you happen to be Game or Makro… In the third quarter of 2021, more users were shopping at Takealot than they were at Game and Makro combined.

Economic democracy?

It’s clear that Takealot has captured market share from many retailers, but what might be more significant is how widely online shopping has been adopted across the income spectrum in South Africa.

Some people will argue that our data is not representative of the whole market. Yes, 22seven’s 60,000+ users are younger and with higher incomes than the national average, and most live in urban areas, but this group likely represents the leading edge of online adoption.

This chart shows the proportion of 22seven users with transactions at Takealot over a two-year period. There were spikes during lockdown in 2020, but that growth was largely maintained through 2021 in all groups. Besides demonstrating the differences in levels of online adoption across income bands, it also shows increasing online adoption across all bands. In other words, our data may well indicate leading-edge adoption, but other demographics are likely to follow the same pattern.

Who shops at Takealot and what are they spending??

Let’s dive even deeper into recent spending at the retailer. Here are some eye-opening stats from the 14,819 22seven users who went big on Black Friday specials in November 2021, averaging nearly two Takealot deliveries each that month.

Want to know more??

22seven Insights offers investors and brand leadership a rare view into the actual purchasing behaviour of a large group of real consumers in South Africa – in real time.

Our detailed dashboards for various retail sectors document market activity and relative performance across different income groups and allow subscribers to track the drivers of their own company’s performance, as well as their competitors’.

Contact us to find out how our data can help you better understand your customers. To follow all the latest data-driven consumer trends in South Africa, sign up to receive?Nugget, our bi-weekly newsletter.