South Africa’s Rattled Retail Chains Are Taking The Battle Back To eTailers

Walmart-owned retail group Massmart has ambitious plans to become a leading e-commerce player in South Africa, and the recent announcement of its intention to shut down its well-known albeit loss-making Game stores in Nigeria, Ghana, Kenya, and Uganda speaks to this new direction of increased focus on online shopping.

Massmart appears to be raising the stakes with that telling move, much like how other top brick-and-mortar retailers in South Africa, such as Shoprite and Woolworths, are expanding their e-commerce capabilities to compete more forcefully online.

Sylvester John, who was a key figure behind the development of e-commerce platforms at Walmart in the US and was handpicked to do a similar job at Massmart, believes the online shopping market in South Africa is poised for lift-off, revealing in an interview that he “expects local e-commerce sales to jump to about 12 percent of total retail sales by the end of the decade, from around 4 percent as of today.”

South Africa’s legacy retail chains, which have displayed a keen interest in upping their online shopping capabilities in recent times, could contribute significantly to the forecasted growth spurt. Massmart, whose brands are arguably the worst hit by the changing landscape, has been posting losses and losing market share to bigger local rivals in South Africa, forcing the majority owner, Walmart, to cut costs and invest more capital (particularly in e-commerce capacity) to turn the company around.