Acquisition in line with Massmart’s intent to accelerate eCommerce growth
In line with its strategic intent to accelerate growth in eCommerce, today, Massmart announced that it is in negotiations to acquire a controlling stake in OneCart PTY (Ltd) (OneCart). Negotiations are at an advanced stage and the Group hopes to conclude discussions in the coming weeks.
Commenting, Massmart Group Chief Executive Officer, Mitch Slape said, “The proposed acquisition is consistent with Massmart’s strategy to invest in and accelerate eCommerce growth, particularly in the fast growing on-demand delivery segment. A key objective going forward would be to invest in aggressively growing and fully supporting OneCart’s existing independent retailer marketplace model that enables consumers to order from multiple retailers via a single platform.” In March this year Massmart outlined the Group’s immediate eCommerce priorities including to:
- Establish a unified group-wide eCommerce capability under the leadership of Sylvester John who has been seconded by Walmart to fulfil the role of Massmart Group eCommerce Vice President;
- Revamp the makro.co.za, game.co.za and builders.co.za online user interfaces, including key functionalities like search, to provide a more seamless and intuitive customer experience;
- Develop new transactional and value adding mobile first digital solutions that cater to different customer occasions, journeys and segments, including participation as anchor retail tenant on the Vodapay Super App; and
- Strengthen and expand order fulfilment capabilities such as on-demand and same-day order fulfillment, ‘ship to home’ capability from Distribution Centres to supplement store fulfilment capacity and improving the click and collect customer experience in stores.
Commenting about Massmart’s eCommerce ambitions Sylvester John, Group Vice President for eCommerce said “It’s clear that we have the brand recognition, geographical presence, merchandise assortment, procurement scale and primary logistics capability to be an even more successful eCommerce player. In addition to better leveraging these assets, our immediate opportunity is to improve and expand our digital sales platforms and last-mile delivery capability. The successful acquisition of OneCart will go a long way toward achieving this.”
In 2020, online sales across Massmart increased by 58.6%, the number of unique eCommerce customers grew by 73% and click-and-collect orders increased by 69.5%. eCommerce contributed 1.8% of total sales representing a significant increase over the prior year.
OneCart has achieved Year-on-Year growth of 400% since inception.
Slape concludes, “Successful closure of the proposed OneCart transaction will contribute immeasurably to our centralised eCommerce capability that has specifically been established to concentrate scarce expertise, including Walmart experience, in a way that will accelerate adoption of eCommerce best practise at Massmart.”