Massmart e-commerce sales jump 50%

Walmart-controlled South African retail group Massmart reported a 50% year-on-year jump in e-commerce sales for the 26 weeks ended 26 June 2022, even as its income statement was once again stained in red ink.

Sales from Massmart’s e-commerce platforms grew by 50% compared to the prior-year period, while orders increased by 109% and gross merchandise value (GMV) increased by 108%, it said.

Group e-commerce is not disclosed as a separate operating segment, and is included with the corporate operations. However, it said investments into e-commerce pushed up operating costs.

The group disclosed the following information about its retail brands’ e-commerce initiatives:

• Hardware chain Builders enhanced its online platform, resulting in a 51% increase in GMV compared to the same period in 2021.
• Game launched a new website in April, including an expanded assortment range. GMV increased by 26%.
• Massmart Wholesale, which includes Makro, Shield and Jumbo Wholesale, increased the number of products available for sale online, pushing GMV up by 21% at Makro.

A year ago, Massmart said that e-commerce was becoming core to its growth strategy.

Sylvester John, seconded from Walmart to lead Massmart’s e-commerce initiatives, said in an interview with TechCentral last October that the group expected e-commerce in South Africa would roughly triple in size as a proportion of overall sales by 2030.

John said US-based Walmart, headquartered in Bentonville, Arkansas, was “paying close attention to e-commerce” in its various operations around the world, including South Africa. E-commerce was a “critical part” of Massmart’s growth strategy, he said.

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“We are rethinking the entire agenda. We see growth in Web, we are introducing mobile through [Vodacom’s ‘super app’ VodaPay, and we are digitising our B2B business and doing stuff in the B2B space that is going to be incredibly impactful,” he said.

For its latest reporting period, Massmart produced a net loss of just over R1-billion, a 4% improvement on the net loss recorded in the same period a year ago. The headline loss was R942.5-million, a decline of 46% compared to the R645.4-million reported previously.

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The group accumulated total group sales of R41.3-billion – flat compared to the same period in 2021. Trading profit declined by 27.2%, however. Retrenchment and “business transformation” costs amounted to R205.9-million, R184-million of which related to a once-off negotiated lease settlement cost in respect to the Riverhorse Distribution Centre in Durban that was destroyed during July 2021’s violent riots and looting in KwaZulu-Natal.  — (c) 2022 NewsCentral Media