The long-term goal for Takealot Fulfilment Solutions is to eventually take on the sector’s big and established logistics players.
South Africa’s largest e-commerce retailer is looking beyond online shopping for its next growth phase, with Takealot Group positioning its standalone logistics arm, Takealot Fulfilment Solutions (TFS), as a major future revenue driver.
The logistics business, launched a year ago, offers end-to-end fulfilment services, including warehousing, inventory management, picking, warehouse packing, last-mile delivery and international freight forwarding.
Despite the business being a new contender in the market, Takealot Group believes it can disrupt SA’s logistics market as it eyes successfully competing against established local logistics providers, in the medium- to long-term.
Originally developed to support Takealot’s own marketplace operations, TFS has evolved into a standalone logistics and supply chain business serving marketplace sellers and external companies looking to strengthen their e-commerce and on-demand capabilities.
During a telephone interview, Takealot Group CEO Frederik Zietsman told ITWeb while more than 16 000 sellers on Takealot’s marketplace already make use of the logistics unit, the company’s biggest opportunity lies outside its own ecosystem.
Zietsman explained that the business is targeting brands, retailers, distributors and other organisations selling directly to consumers through their own digital platforms.
“We’ve got more than 16 000 small businesses that transact on the Takealot marketplace. They need logistics solutions to bring inventory in and back to them.
“The business has rapidly expanded its customer base beyond marketplace sellers, with JSE-listed companies, telecommunications operators, distributors and brands increasingly outsourcing their fulfilment operations to TFS.
“This is where the real potential and opportunity in TFS sits – in the external customer base, where we support businesses that have their own platforms, where they sell directly to consumers.”
In addition to traditional parcel fulfilment, the unit has introduced on-demand delivery services, allowing retailers and restaurants to fulfil orders placed through their own sales channels rather than through Takealot.com or Mr D.
Its early traction is reflected in Takealot Group’s financial results for the year ended 31 March, released this week by parent company Naspers.
Frederik Zietsman, Takealot Group CEO.
The unit recorded 93.5% year-on-year revenue growth during FY26, while more than half of the top 40 highest-volume marketplace sellers on Takealot.com now use the platform to deliver their parcels.
As Takealot Group, (Takealot.com, Mr D and TFS), the company posted adjusted earnings before interest and tax of R171 million, representing a turnaround of R384.8 million from the previous year’s loss of R213.8 million.
Revenue increased 18% to R17.7 billion, while the group processed more than 60 million orders across over 6.2 million active customers.
“Fifteen years after pioneering South African e-commerce, Takealot Group has reached a pivotal inflection point, transitioning into a highly-profitable, cash-generative business with all three units profitable,” said Zietsman.
“At our core is an interdependent ecosystem leveraging infrastructure to connect millions of customers, thousands of merchants and nationwide partners.”
Zietsman noted that the company’s long-term goal is to help TFS to grow beyond all Takealot’s business units, and eventually take on the sector’s big and established logistics players.
The warehousing network, technology platforms and nationwide delivery capabilities, developed over 15 years to support Takealot.com and Mr D, are now being commercialised through TFS, enabling it to offer lower-cost fulfilment services while maintaining high service levels, he added.
“The reason we can compete in those markets, having not been an incumbent in that market, is because in our core business, we’ve been able to generate economies of scale and technology platforms at the lowest cost to serve, but also provide good service levels and reliable technology in the market. So, TFS today does about one-fourth of the total last-mile deliveries in the country.”
Zietsman added the business expects volumes to rise as more businesses migrate onto the platform.
According to Zietsman, TFS is benefiting from the rapid expansion of SA’s e-commerce sector, as more brands, distributors and small businesses shift sales online and require sophisticated fulfilment partners rather than building costly logistics operations themselves.
“We’re seeing telco brands themselves that sell direct-to-consumer, distributors of goods. They all become our clients now, because I think there’s a general realisation that e-commerce is growing fast and it’s the only channel that’s giving brands and distributors volume growth.”
According to the latest World Wide Worx Online Retail in South Africa study, online retail sales are expected to exceed R130 billion, accounting for 10% of total retail sales. The research says online shopping has become “a structural force in the economy”, driven by growing consumer adoption, on-demand grocery services, fashion retail and increased competition from local and international players.
While TFS currently provides logistics services, Takealot’s longer-term vision is to transform the business into a broader technology-enabled supply chain platform.
Zietsman said the company sees significant demand from businesses selling across multiple online channels, creating an opportunity to develop software that simplifies order management and fulfilment while reducing operational costs.
“Ultimately, if you look at the friction factors that persist in the digital e-commerce space, and predominantly within the fragmented sections where small businesses and direct-to-consumer businesses are growing quite fast, where these businesses sell on multiple channels. The exciting part of TFS is that we will also become a tech player and provide orchestration layers for them to be able to handle multiple channels at once without excess of friction. So, there’s a definite diversification opportunity.”
This diversification strategy allows Takealot to participate in the growth of SA’s e-commerce sector regardless of whether transactions occur on its own platforms.
“The reality is as e-commerce grows, TFS will find revenue streams within that value chain, whether it comes from our own platform or not.”
