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Takealot is battling to handle the increased traffic as a result of Christmas orders and to deliver packages on time. And it’s not alone. Woolworths, Incredible Connection, Spree and Exclusive Books told Rapport they had to put special plans in place to deal with the increased Christmas traffic on their websites.
But the Christmas pressure will not put a damper on expectations for the growth of online sales in South Africa.
According to market research company Euromonitor, the total volume of internet sales will rise from R6.6 billion in 2015 to R13.7 billion in 2020, an increase of more than 104%.
Another market research company, Nielsen, says groceries and other household products (such as cleaning materials) and personal hygiene and beauty products will, according to expectations, show the most growth.
Various South African retailers told Rapport they had big plans for expanding their online operations in the coming year.
Pick n Pay is building a new warehouse for online orders in Isando in Johannesburg. David North, group head of corporate affairs and group strategy, said the company has already been using a warehouse in Brackenfell for online orders. This chain store said in October that its online business had grown by 34% in the first six months. The rand value of the growth was not supplied. PnP is the third biggest online store after Takealot and Apple’s App Store.
Woolworths, the fourth biggest online store, also began using a special online warehouse for the first time this year. This warehouse is in Johannesburg. Liz Hillock, head of digital at Woolworths, said clothes, home goods and beauty products are sent from the warehouse and fresh produce is still obtained from the shops themselves. She said that new online shoppers over the Christmas period had grown by 50% and some categories had seen sales growth of more than 100% but she did not reveal the rand value of that growth.
Orders at the biggest online clothes store, Spree*, increased by more than 80%, said Vincent Hoogduijn, executive head of Media24 e-commerce. The biggest growth was in the sale of children’s clothes, which grew by 136%. Christmas sales are also double as much as Christmas sales last year and, on Black Friday, there was 348% more traffic on the website compared with a normal day. Like the other retailers, Hoogduijn did not give the rand value on which the percentage was based.
Incredible Connection’s head of e-commerce, Dietz Meiring, said online growth over the past year had exceeded their expectations. The retailer aimed to be the biggest online store in its market segment over the course of the next year.
Takealot has opened two new warehouses in Montagu Gardens in Cape Town and Kempton Park on the East Rand of Gauteng. These warehouses of 30 000 square meters are more than double what they previously were. Takealot also bought Mr Delivery in June 2014 and Mr D Courier now delivers packages for Takealot.
One of the reasons that growth is expected is because once people have bought something online, they generally come back for more.
Ailsa Wingfield, director of marketing and communication at Nielsen, said that depending on the product, people begin to buy almost as much online – or more regularly – as from a traditional shop.
Nielsen’s data shows that people who buy the following products now buy them more regularly online: take-away meals, personal and beauty products, clothes, video games, IT and cellphones, and tickets for concerts or travel.
But the data shows that people who order fresh food online still shop in traditional stores more often.
Online sales are still a drop in the ocean when it comes to total store sales.
According to Euromonitor, online retail spend only totalled 0.76% of total retail sales in 2015. By 2020 it will rise to 1.3%, according to expectations.
In the meantime, Takealot took to social media to reassure users who were afraid that Christmas presents won’t be delivered on time.
Some packages had not been delivered after more than a week and there were even complaints about packages that were ordered on Black Friday but had still not been delivered.
Regular users are used to packages being delivered as soon as two days after the order has been place.
Takealot’s answer to clients on social media is that, in certain cases, they were waiting for stock to be delivered.
Takealot told Rapport that most packages will still be delivered on time.
“It’s unavoidable that the volume of orders in the run-up to the festive season will be high and any late deliveries are the exception rather than the rule,” said Takealot.
Takealot said its festive season began on the weekend of November 25 and that it sometimes had 300% more traffic on the website than usual.
» City Press is also owned by Media24.
