Shoprite in JV with RTT as e-commerce lifts off in South Africa

South Africa’s biggest supermarket group, Shoprite Holdings, said on Monday that its upmarket grocery chain, Checkers, has entered into a joint venture agreement with its delivery partner, RTT Group, as part of a push to grow its e-commerce business.

After years spent lagging much of the world in terms of e-commerce, South African retailers and delivery start-ups have generated record online sales as consumers avoided shops during the Covid-19 pandemic.

But the boom has strained the capacity of even the largest retailers, forcing them to invest and make e-commerce acquisitions to improve wait times and services, complementing scheduled delivery and click-and-collect services with on-demand delivery.

Shoprite said the joint venture with RTT Group will protect the learnings, technology and intellectual property created by the Checkers Sixty60 on-demand delivery service to date while facilitating future innovation and development of the group’s last-mile logistics.

“Owning the last-mile home delivery aspect of our Sixty60 service is an important part of building out our digital ecosystem for customers,” Shoprite Group CEO Pieter Engelbrecht said. “This RTT on-demand joint venture will allow the group the opportunity to continue enhancing our order fulfilment and last-mile delivery capabilities.”

The deal is due to be finalised prior to Shoprite’s June 2022 year-end.

New entity

RTT Group’s on-demand business will be transferred into a new company in which Shoprite Checkers will subscribe for 50% of the issued ordinary shares, Shoprite said.

As part of the deal terms, Checkers Sixty60 will continue to use RTT on-demand as its delivery partner, it added.

Earlier this month fashion and homeware retailer TFG said it was buying on-demand online shopping platform and last-mile delivery provider Quench, while Massmart, majority-owned by Walmart, bought a controlling stake in grocery delivery service OneCart in October.  — (c) 2021 Reuters