Shoprite in JV with RTT

As e-commerce lifts off in SA.
Image: Supplied

South Africa’s biggest supermarket group, Shoprite Holdings, said on Monday that its upmarket grocery chain, Checkers, has entered into a joint venture agreement with its delivery partner, RTT Group, as part of a push to grow its e-commerce business.

After years spent lagging much of the world in terms of e-commerce, South African retailers and delivery start-ups have generated record online sales as consumers avoided shops during the Covid-19 pandemic.

But the boom has strained the capacity of even the largest retailers, forcing them to invest and make e-commerce acquisitions to improve wait times and services, complementing scheduled delivery and click-and-collect services with on-demand delivery.

Shoprite said the joint venture with RTT Group will protect the learnings, technology and intellectual property created by the Checkers Sixty60 on-demand delivery service to date while facilitating future innovation and development of the group’s last-mile logistics.

“Owning the last-mile home delivery aspect of our Sixty60 service is an important part of building out our digital ecosystem for customers,” Shoprite Group CEO Pieter Engelbrecht said. “This RTT on-demand joint venture will allow the group the opportunity to continue enhancing our order fulfilment and last-mile delivery capabilities.”

The deal is due to be finalised prior to Shoprite’s June 2022 year-end.

New entity

RTT Group’s on-demand business will be transferred into a new company in which Shoprite Checkers will subscribe for 50% of the issued ordinary shares, Shoprite said.

As part of the deal terms, Checkers Sixty60 will continue to use RTT on-demand as its delivery partner, it added.

Earlier this month fashion and homeware retailer TFG said it was buying on-demand online shopping platform and last-mile delivery provider Quench, while Massmart, majority-owned by Walmart, bought a controlling stake in grocery delivery service OneCart in October.

(c) 2021 Reuters

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A great example of how to run a company in the worst of conditions. The ANC should go to Pieter for some lessons.

Does RTT run the scooters??

Quite amazing the sort of valuations being thrown at e-commerce again. People have short memories, go back two decades and see what happened with WebVan. Their spectacular collapse is a rounding error compared to the valuations thrown around nowadays for what is often going to be lifelong loss makers. DeliverABurger, whatever. Taking a large transaction slice from the poor restaurant is not sustainable. It was one thing when LittleItaly family pizzeria delivered to nearby regular residents in dense area like Manhattan. Now we have scooters criss-crossing suburbia. Nuts.

Not saying e-commerce outside fast food is not a thing, just that it cannot be done profitably without charging at least a large portion of the incremental cost of fulfilling the transaction. Retailers go from the customer doing the picking and transport to house for free to the retailer doing picking, delivery and returning to base; often for a single small order.

End of comments.

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