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- Takealot.com has launched an on-demand service that promises to deliver products such as laptops within an hour.
- It is being rolled out in Cape Town's northern suburbs before a wider launch.
- Until now, on-demand delivery has largely been the domain of SA's grocers.
- For more financial news, go to the News24 Business front page.
Takealot.com is piloting an on-demand service in Cape Town that will see it delivering everything from laptops to toys and makeup to its customers within an hour.
The new 60-minute service, called TakealotNOW, sees SA's largest ecommerce site, which is owned by the Takealot Group, entering a market that up until now has largely been the preserve of the country's grocery retailers.
To manage the logistics of it, a section of Mr D, also owned by the Takealot Group, will be specially dedicated to the new service that will deliver a range of products up until 22:00 at night. It is also offering free delivery for the first month.
Initially, the service will only be available in Cape Town's northern suburbs, namely Durbanville, Belville, Brackenfell, Kraaifontein, Kuilsriver and Parow, with plans to expand.
Frederik Zietsman, CEO at Takelot.com, said in a statement that SA's online shoppers were increasingly becoming accustomed to fast turnarounds on grocery deliveries and that the retailer had noticed a "steady increase in sales in certain categories when we offer our popular same-day, next-day delivery or collection options".
Mr D CEO Alex Wörz said TakealotNOW was an opportunity to scale across the country, using a 15 000-strong distribution network of delivery partners.
But Protea Capital Management CEO Jean Pierre Verster, for one, was "perplexed" by Takelaot.com's move into on-demand services, saying while there were a number of delivery platforms around the world that had launched on-demand services, these were usually for groceries, "where convenience is usually more important".
"I am a bit perplexed as to why the sellers of electronics products want to have an on-demand service. Whether people who are buying electronics, need to have them delivered so quickly, is an open question. Normally there isn't any time sensitivity in the delivery of electronics such as smartphones – which are the typical products that Takealot.com delivers."
Verster said the business model for on-demand services was also a more difficult, "because you obviously need a more intricate delivery service to allow you that very quick delivery".
But the likes of Amazon possibly entering the South African market in the near future may have been an added incentive for Takealot.com to launch an on-demand service, said Verster.
READ | Amazon may be gearing up for its launch in SA
In this context, the move could be seen as a first salvo in any battle for market share, should the American online retail giant enter the fray.
Makwe Masilela, who heads up Makwe Fund Managers, agreed, saying it made sense for Takealot.com to look to enter this market, especially given the success it had already brought for SA's grocery retailers.
He said the adoption of online retail had also been sped up dramatically in SA by the Covid-19 pandemic and resultant lockdowns, with consumers increasingly adjusting to online buying, which is often much safer than venturing out into physical stores.
With Amazon possibly entering the market, Takealot.com may be looking to steal a march on it by entrenching itself as the main non-grocery retailer using on-demand services.
"It makes sense for Takealot to tap into this market before the likes of Amazon come in. We know that Amazon is big in delivery, so I think Takealot wants to be the first one out of the blocks with it so customers can get used to it before the other players come in. It is a way of trying to fight and capture a slice of the market before others enter [it]."
Asked for comment on whether Amazon's possible entry into SA and the online retail ambitions of other rivals such as Walmart-owned Massmart were motivators for its on-demand service, Takealot.com said that in SA, e-commerce only represented 4% of the total retail market, "allowing for a healthy space for opportunity and growth".
"As the country's leading online retailer, we're confident in our ability to succeed by continuing our customer-centric approach."
It also said this same approach had helped drive the innovation behind TakealotNOW, adding that "by understanding which products our customers need fast, we've been able to carefully curate our selection".
For example, it said it had seen a shopper use TakealotNOW to order a computer monitor and Wi-Fi extender at 09:30 and by 10:00 be equipped to work from home, while another shopper was able to order makeup after 21:00 and receive it within the hour.
It said it looked forward to expanding the service, adding it would continue to curate the product selection "based on specific areas and our shoppers' needs".
