AFTER THE BELL
When the going gets weird, the weird go shopping
This is modern shopping for you: the curious process of staring at pictures on the screen, wondering whether the picture on the screen actually represents the object.
There is a great comedian called Natasha Leggero who does a sketch about modern shopping. In the old days, she says, she would go to the shops, try something on, think about it, go back and possibly buy it.
Now what she does is this: she sits on the couch, smokes a little pot, and thinks of something weird, like a gold stapler. Then the next day, someone throws it over the fence. “I was only kidding,” she says. And you can now be as specific as you want. You just think, I want a cornflower-blue kimono, and suddenly it arrives. “This is not a good way to shop!” she shouts.
This is modern shopping for you: the curious process of staring at pictures on the screen, wondering whether the picture on the screen actually represents the object. And that’s “normal” shopping. Then there is reaction shopping on Instagram, where you can buy — and I am not making this up — a self-rolling yoga mat, an electric jellyfish aquarium and a weather-predicting storm cloud. What is happening to out shopping habits?
The have really changed dramatically, and overall, I think for the better. Obviously, Covid was the catalyst that started the revolution, so much so that there are now rumours that Amazon, which has long considered South Africa and Nigeria backwaters, is coming to town.
The question is what will happen to our local champion, Takealot. Here is my guess: it will get better. My Takealot correct delivery ratio is now around two to one; in other words, they get it right about once every three times. But I still go back, because getting a parcel from Takealot is something like Christmas — you just don’t know what you are going to get.
Prosus, which owns the company, announced its results this week, and Takealot featured minimally, subsumed by much larger issues. As it happens, the news is very mixed. Takealot’s revenue is up massively, by 34% to R13.5-billion for the year. That is an impressive rise, but it’s still a long way short of Massmart, for example, which has a turnover of around R80-billion. But Takealot’s profitability is down and cash flow has been smacked for six.
Welcome, Takealot, to the Amazon crisis, which most of us have long forgotten about. Amazon, those of us a little long in the tooth will remember, was at one point close to bankruptcy. That was before it became the dominant shopping entity in the largest economy on the planet and a fabulous success. Such is the world.
The problem is simple: if you are fighting against supermarket prices, then there is not much margin to play with. And if you start growing quickly, your very slight losses turn into very big losses very quickly.
Takealot’s big advantage, we think, is that we know the end of this story, because that road has already been travelled by Amazon. It also has a first-mover advantage, with infrastructure and existing customers. Whatever the case, it’s critical to have a holding company with very deep pockets — which, fortunately, it has.
Takealot’s problem is that its competitor’s pockets are even deeper. And ours (the consuming public) are getting shallower. DM/BM
Daily Maverick © All rights reserved