• Pick n Pay and Mr D partnership benefitted from synergistic combination
• Online sales in South Africa grew by 35% in 2022
• Africa set to have half a billion ecommerce users by 2025

South Africa’s 2^nd largest retailer Pick n Pay said its online sales volumes significantly soared after hopping onto the Mr D’s delivery app. The company achieved total online sales growth for the year of 72% including scheduled delivery service. On demand online sales for the year were reported at over 100% partially attributed to the strong growth in sales from Pick n Pay’s own app asap!

Pick n Pay Regional Store Footprint

The Mr D offer grew from a limited number of stores in early October to a nationwide offer by the end of the year. Pick n Pay said the offer benefitted from a synergistic combination of Pick n Pay’s extensive store network, store management system, fresh product offering and in-store picking experience and Mr D’s strength in user interface design, a 2.5 million active customer base and a delivery fleet of 15 000 scooters.

Mr D is a subsidiary of South Africa's leading e-commerce retailer, takealot.com, part of the global internet group, Naspers.  Mr D started as Mr. Delivery in 1992 and was acquired by takealot.com in 2014, Mr D Food became South Africa’s leading online food delivery business and has grown exponentially in recent years. The app boasts partnerships with over 8 000 restaurants and delivers to more than 2500 suburbs in 9 provinces across SA.

For the broader retail sector, online sales grew by 35% in 2022, down from 40% in 2021. While the strong momentum has been spurred by the occurrence of COVID-19, it is likely to stay in the post COVID-19 period given the new defined consumer patterns and behaviour and the huge costs benefits, over the longer term, accruing to companies adapting to the new technologies.

Sales value via online channels in South Africa surpassed the R50 billion mark in 2022, signifying the new trajectory. Some of the outperformers include Shoprite’s Checkers Sixty60, an online retail application by the same retailer, which grew turnover by 150% from July 2021 to July 2022, Mr Price, which reported online retail sales up 48.2% for the year to April 2022. 

Online sales still have significant headroom given that they account for only 3.5% of total retail sales in South Africa. A key observation has been that the growth in online retail sales, is not emanating from new demand but rather a shift from conventional in shop purchases to online, for the respective South African market.

Africa is forecast to surpass half a billion ecommerce users by 2025, which will have shown a steady 17% compound annual growth rate (CAGR) of online consumers for the market.