- Makro and Builders' Warehouse will become anchor tenants on Vodacom's new "super app", which Massmart believes will give it access to millions of new customers.
- The Walmart-owned group saw strong growth in online sales over the past year.
- The market liked its results, sending its share price 20% higher in a single day.
- For more stories, go to www.BusinessInsider.co.za.
Walmart-owned retailer Massmart has big plans for mobile shopping in South Africa, including its own new apps and becoming an “anchor tenant” on Vodacom’s new so-called super app.
The app, built in partnership with the digital payment group Alipay (which is part of the Chinese behemoth Alibaba), will offer mobile shopping and music streaming as well as a large range of services, including the ability to pay bills, send money to friends, and even borrow money for a small business or buy insurance via your phone. The super app is due to be launched by mid-2021.
Vodacom’s 44 million subscribers will initially be able to buy directly from Makro and Builders Warehouse on the app, and Game will later be added.
Richard Inskip, Massmart’s chief operating office, said that the Vodacom partnership will widen its customer base.
“It gives us access to a lot more customers than we currently have. We believe that we would get a lot more younger, tech-savvy customers to come to us (via the Vodacom app),” said Inskip.
He says that Massmart wanted to effectively become an anchor tenant on the Vodacom app, before its competitors.
“We would want that in advance of our competitors like Takealot. We believe that we’d be better positioned to serve the customers,” he said.
Massmart also recently partnered with OneCart and UberEats to expand its reach, and plans to introduce its own shopping apps.
Driving the retailer’s digital plans is Sylvester John, who joined Massmart last year. He was previously Walmart North America’s vice president for so-called “last mile delivery” - products’ journey from the warehouse shelf to customer doorstep.
“We are expanding into mobile apps and over time (will adopt) a mobile-first strategy. A large percentage of our current customers access our site by phone,” John said.
To improve its “last mile” operations, the company is partnering with global logistics platform Far Eye, who will be “working to centralise all customer deliveries onto a single sophisticated platform”.
Massmart estimates that it is now the second-biggest ecommerce player in South Africa – after Takealot.
Its online sales breached R1 billion for the first time last year. Builders’ Warehouse’s online sales more than doubled, while Game (78%) and Makro (42%) also saw strong growth.
However, this could not save the rest of the group, and overall sales declined by almost 8% to R86.5 billion over the past year.
While the company says its online operations are profitable, as a group, Massmart suffered a headline loss of R924 million last year – albeit smaller than 2019’s loss of almost R1.2 billion.
This beat expectations and, along with its new plans to sell some of its brands, sent the company's share price rocketing by 20% on Monday.
Massmart was last trading at R51, almost at its best level over the past year - and 190% higher than its low point of below R19 in July 2020.