Shoprite to buy powerhouse behind Checkers Sixty60

Shoprite has received approval from South Africa’s competition watchdog to acquire Pingo Delivery, the impressive logistics system behind its Checkers Sixty60 service.

The Competition Commission said it approved the transaction without conditions, as it does not believe the acquisition will substantially lessen or prevent competition in any market.

Checkers Sixty60 is Shoprite’s online delivery business, which allows customers to order groceries from Checkers stores through an application on their smartphone. 

The service was launched in end-2019 and is the top grocery app in South Africa, with over 4.5 million downloads.

It is available at over 500 locations, has provided more than 9,000 jobs, and its sales have increased over tenfold since the first half of 2021.

Logistics has long been touted as the backbone of any successful eCommerce business. Many experts have highlighted that eCommerce is not about a website, app, or product range but rather logistics.

Checkers Sixty60 promises customers to deliver their orders within 60 minutes of ordering and, therefore, relies heavily on having efficient logistics. The backbone of Checkers Sixty60’s logistics success is Pingo.

Pingo is a last-mile logistics provider that was formed in May 2022 through a joint venture between Shoprite Group and Gauteng-based logistics group RTT.

The company provides on-demand delivery services, specifically the collection of an order placed by a customer on an online shopping platform and the delivery of the customer’s order to that customer within a short period of time.

While Pingo has since grown beyond just servicing and supporting Sixty60 and now works with a variety of businesses, the service is still the largest part of Pingo’s operations – and it is performing very well.

However, Shoprite CEO Pieter Engelbrecht told News24 that relying on third-party operators could pose problems as Shoprite was expanding so fast.

“We need to have the entire value chain delivered at speed with continuous enhancements, and currently, we are growing at such a pace that it is hard to keep up with us in terms of third-party vendors that maybe do not have the same balance sheet,” he told the publication.

He said the acquisition made sense given the retailer’s plans to significantly expand Sixty60’s brand and offer a similar service for spaza shop owners at its wholesale retailer, Cash & Carry.