Massmart’s big bet on e-commerce in South Africa

With an explosion With online sales expected in South Africa in the coming years, e-commerce will be at the core of the growth strategy of Massmart, one of the largest retail groups in South Africa, which is part of Walmart.

The group, which includes brands such as Builders, Makro and Game, is introducing mobile shopping “mini apps” this week in the new VodaPay “super app” from partner Vodacom Group, which was launched on Sunday in South Africa with an aggressive “ Hard-Launch “advertising campaign in consumer media.

But this is just the beginning of much bigger ambitions for Massmart, said Sylvester John, the head of e-commerce, in an interview with TechCentral on Friday.

E-commerce is becoming a much more important part of Massmart’s strategy

John was posted to South Africa earlier this year by Walmart in the US to lead his initiatives in both business-to-business and business-to-consumer sales in that market.

John said online retail is becoming a much more important part of Massmart’s strategy, especially given the group’s expectations that South Africa’s e-commerce share of total sales will increase from around 3% currently to around 11-12 will roughly triple% by 2030.

John, who has worked at Walmart in the US for the past 10 years – six of those involved in e-commerce and omnichannel (integrated channel) initiatives – said the Bentonville, Arkansas-based retail giant “E-Commerce is” very vigilant “in its various activities around the world, including South Africa. E-commerce is a “critical part” of Massmart’s growth strategy, he said.

Big ambitions

John, who is not a stranger to Massmart or the African continent, worked for the group in West Africa about eight years ago – he was in charge of the region. And before joining Walmart, he had 11 years of international business experience, about half of which time he worked for “another company” in Africa (his LinkedIn profile shows it was for a US nonprofit educational institution called Enactus) .

One of John’s first steps as VP of E-Commerce at Massmart was to create a core e-commerce function. The group’s e-commerce sales were just under R 1 billion last year. “We have ambitions to grow that number significantly over the next five years,” he said, but declined to publicly share the goals.

“We are rethinking the entire agenda. We’re seeing growth on the web, we’re rolling out mobile through VodaPay, and we’re digitizing our B2B business and doing things in B2B that are going to be incredibly powerful, ”he said.

Massmart’s mini-apps for VodaPay will roll out the same week that Makro completed the OneCart acquisition

None of this is surprising considering how quickly Walmart expects e-commerce in South Africa to grow to around 12% of total retail sales over the next 10 years. “This is a big change,” said John. “And the overall cake will grow too.”

The launch of Massmart’s Mini-Apps for Builders and Macro on VodaPay comes the same week that Macro completed its acquisition of OneCart, the grocery store and logistics company that like its rivals Bottles (bought from Pick n Pay last year ) and Zulzi, enjoyed strong growth during the Covid-19 lockdown. The OneCart deal follows the takeover of Cape Town-based start-up WumDrop for last mile delivery in 2017.

In addition to expanding its e-commerce logistics business, Massmart plans to improve its click-and-collect services, where it offers both e-commerce lockers – in garage forecourts and elsewhere – as well as in-store pickup of online orders.

“We have the opportunity to revise this offer. We think it can get better. In the next three to six months we will be renaming it and improving the service offering based on how long it takes for people (in our branches) to get on and off. “

When launching the VodaPay mini-apps, John said Massmart has a strong partnership with the telecom operator and intends to work together on other initiatives as well. “There is a lot we can do together to develop the relationship.”

However, he said that the launch of VodaPay’s mobile apps – the first smartphone shopping apps from the Macro and Builders brands – is “not the be-all and end-all” of the group’s mobile strategy. But building the apps on top of VodaPay – which leverages technology and finance rails developed by China’s Alipay – part of Jack Ma’s Ant Group – made getting to market faster and easier than building everything from scratch, John said.


“It’s a bit like building a store in a mall instead of building your own store,” he said. “It’s worth being in a shopping center – you have a relationship with a developer and you can use the shared services. And the Alipay tech stack comes with all the trimmings and saves an incredible amount of development time. It’s also very convincing for the customers. “

Massmart, of course, hopes to tap into Vodacom’s large customer base in South Africa and the operator’s plans to aggressively market VodaPay. John emphasized that Massmart retains full control over the mini-apps it has developed and launched on the VodaPay platform.

The VodaPay initiative, he said, “is in line with the evolution towards a mobile-first model and serves as a launch pad for our mobile applications”. It is “only part of a diverse digital transformation that is underway” at Massmart. – © 2021 NewsCentral Media

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