With an explosion in online sales expected in South Africa in the coming years, e-commerce is becoming core to the growth strategy of Walmart-owned Massmart.
The group, which owns brands such as Builders, Makro and Game, has launched mobile shopping “mini apps” in partner Vodacom Group’s new VodaPay “super app”, which was “hard-launched” in South Africa on Sunday with an aggressive advertising campaign in consumer media.
But this is just of the start of much bigger ambitions for Massmart, Sylvester John, its head of e-commerce, said in an interview with TechCentral on Friday.
John was seconded to South Africa earlier this year from Walmart in the US to spearhead its initiatives in both business-to-business and business-to-consumer sales in this market.
He said online retail is becoming a much more important component of Massmart’s strategy, especially given the group’s expectations that e-commerce in South Africa will roughly triple in size as a proportion over overall sales, from about 3% now, to about 11-12% by 2030.
John, who has been with Walmart in the US for the past 10 years – six of those involved in e-commerce and “omnichannel” (integrated sales channel) initiatives – said the Bentonville, Arkansas-headquartered retail giant is “paying close attention to e-commerce” in its various operations around the world, and that includes South Africa. E-commerce a “critical part” of Massmart’s growth strategy, he said.
No stranger to Massmart, or the African continent, John completed a stint working for the group in West Africa about eight years ago – he headed up the region. And prior to joining Walmart, he had 11 years of international business experience, with about half that time spent working for “another company” in Africa (his LinkedIn profile shows it was for a US education non-profit called Enactus).
One of John’s first moves as vice president of e-commerce at Massmart has been to create a centralise e-commerce function.
Group e-commerce sales last year were slightly under R1 billion.
“We have ambitions over the next five years to grow that number substantially,” he said, but declined to share targets publicly.
“We are rethinking the entire agenda. We see growth in web, we are introducing mobile through VodaPay, and we are digitising our B2B business and doing stuff in the B2B space that is going to be incredibly impactful,” he said.
None of this is surprising if one considers how quickly Walmart expects e-commerce in South Africa to grow over the next 10 years, to around the 12%-of-total-retail-sales mark.
“That’s a big shift,” John said. “And the total pie will grow as well.”
The launch of Massmart’s mini apps for Builders and Makro on VodaPay comes in the same week that Makro completed its acquisition of OneCart, the grocery shopping marketplace and logistics business, which, like rivals Bottles (bought by Pick n Pay last year and rebranded Pick n Pay ASAP) and Zulzi, has enjoyed strong growth during the Covid-19 lockdown.
In addition to growing its e-commerce logistics business, John said Massmart plans to improve its click-and-collect services, where it offers both e-commerce lockers – located in garage forecourts and elsewhere – and in-store collection of online orders.
“We have an opportunity to revamp that proposition. We think it can do even better. Over the next three to six months, we will rebrand it and make improvements to the service offering in terms of how long it takes for people to get in and out (of our stores).”
On the launch of the VodaPay mini apps, John said Massmart has a strong partnership with the telecommunications operator and intends to collaborate on other initiatives, too.
“There is a lot we can do together in the way the relationship evolves.”
However, he said the launch of the mobile apps on VodaPay – they’re the first smartphone shopping apps from the Makro and Builders brands – “is not the be all and end all” of the group’s strategy for mobile. But building the apps on top of VodaPay – which uses technology and financial rails developed by China’s Alipay – part of Jack Ma’s Ant Group – made it quicker to come to market and easier to achieve than it would have been developing everything from scratch, said John.
‘The bells and whistles’
“It’s a bit like building a shop in a mall rather than building a standalone store,” he said. “There is value in being in a mall – you have a relationship with a property developer and you can take advantage of the shared services. And the Alipay tech stack comes with the bells and whistles, and saves an incredible amount of development time. It’s also very compelling for customers.”
Massmart is, of course, hoping to tap into Vodacom’s large customer base in South Africa and the operator’s plans to market VodaPay aggressively. John emphasised that Massmart remains in full control of the mini apps it has built and launched on the VodaPay platform.
The VodaPay initiative, he said, “is in line with evolving towards a mobile-first model and serves as a launchpad for our mobile applications”. It is “just one piece of a multifaceted digital transformation that is under way” at Massmart.
Duncan McLeod is editor of TechCentral, on which this article was first published here.
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