The news: 

• Naspers, a Cape Town-headquartered multinational Internet, technology and multimedia holding company, has disclosed its financial outcomes for the fiscal year ending on March 31, 2024. 
• The company, with interests in online retail, publishing and venture capital investment, reported a trading loss of R252 million ($14 million) for its subsidiary, Takealot Group, an improvement from the R400 million ($22.2 million) loss recorded in 2023.
• Amidst the reported loss, there was a bright spot: Mr D, Takealot Group’s food delivery and logistics arm, reached profitability for the first time. 

Per the latest report, the development follows normalised consumer behaviour post-pandemic and comes amidst a challenging economic environment marked by interest rates and high inflation throughout the year.

Naspers also noted the intense competition faced throughout the year as competitors boost their investments in e-commerce capabilities and continue to gain traction in the cost-sensitive South African market.

The company also highlighted the threat posed by global competitors who have successfully entered the South African market, offering budget-friendly products.

“Temu and Shein have made inroads in the South African market, and the recent arrival of Amazon will intensify competition further,” the holding company stated. 

The Takealot Group, which includes Mr D, the online store Takealot.com, and the fashion e-tailer Superbalist, saw a 2% dip in revenue, bringing it to R14.9 billion ($792 million). Compared to 2023, the group reduced its trading losses by R150 million ($8 million).

Despite this undesirable backdrop, Takealot’s gross merchandise value (GMV) grew by 3% and trading losses were successfully reduced by up to R75 million ($4 million). Additionally, the online platform’s marketplace seller base surpassed 10,000 sellers by March 2024.

To surmount the challenges faced, the holding company stated that Takealot Group’s primary objectives for the 2023/24 financial year were to improve profitability and compete effectively. 

The group also took measures to cut operating costs, which arose due to new warehouses and recruitment in the previous year.

Mr D’s performance saw its GMV increase by 16% and reported a trading profit of R56 million ($3 million). Superbalist, on the other hand, suffered a setback following stiff competition from international players.

Following the significant reduction in its losses between 2019 and 2021, Kim Reid, former CEO Kim of Takealot Group, projected that the company would reach profitability by 2021. 

However, the financial standing of the group hasn’t improved as predicted. The company reported a loss of R407 million ($22 million) in 2023, up from the (R129 million) $7 million loss in 2022.

Untill now, the Naspers subsidiary has yet to reach profitability it was established 15 years ago.