Over the year, the Takealot group incurred a loss of US$22 million (R407 million), significantly higher than the US$7 million (R129 million) a year earlier.
Takealot’s latest financial data was released as part of Naspers’ results for the year ended 31 March 2023.
Naspers said Takealot grew gross merchandise value (GMV) by 13% and revenue by 12% in its local currency, the rand.
Takealot has three main operating units – Takealot.com, Superbalist, and Mr D. Here is how each of these units performed.
- Takealot.com, South Africa’s largest eCommerce platform, grew GMV by 14% year-on-year in local currency.
- Superbalist, a leading South African online fashion destination, grew revenue by 11% in local currency.
- Mr D, the Takealot group’s on-demand business, grew GMV by 8% and revenue by 17%.
However, despite the growth in GMV and revenue, Takealot’s loss widened to US$22 million (R407 million), representing a trading margin of -3%.
Naspers said it reflected slowing consumer demand in a rising inflationary and interest rate environment in South Africa.
It added that rising operational costs impacted profitability due to persistent national rolling power blackouts, escalating fuel costs, and global supply-chain constraints.
Delving deeper into Takealot’s finances reveals an eCommerce company struggling to contain costs and turn a profit.
Former Takealot CEO Kim Reid said the company was set to become profitable in 2021 and was on track to achieve this goal.
Between 2019 and 2021, Takealot significantly reduced its losses, giving the market confidence that it would reach profitability in the 2022 financial year.
However, Takealot is now going in the opposite direction and is widening its losses instead of shrinking them.
Particularly concerning is that Takealot’s growth has slowed significantly over the last two years – both in US Dollars and rands.
All three units – Takealot.com, Suparbalist, and Mr D – have experienced a big decline in GMV growth.
The slower growth raises concerns that Takealot has reached the end of its strong growth phase but continues to struggle to contain costs.
For Takealot to turn profitable, it must increase margins, reduce costs, and become more efficient. All of these are pointing in the wrong direction.
The charts below provide an overview of Takealot’s financial performance over the last three years.