Massmart's plans to buy online delivery startup OneCart at 'advanced' stage

Retailer Massmart, which sells household appliances, furniture and office equipment but has struggled to springboard its online sales to keep up with competitors, plans to buy a controlling stake in grocery delivery app OneCart, the company said on Wednesday. 

Massmart, which owns Game, Makro, and hardware chain Builders Warehouse, delivered a sluggish half-year trading report last week, showing a 4.4% increase in sales compared to the same period in 2020 but a dip when compared with 2019. 

Since Covid-19 struck, South Africans mostly confined to their homes by varying levels of lockdown have flocked to online shopping. 

Besides boosting business for online shops like Takealot and nudging brick and mortar mainstays like Checkers, Clicks and Woolworths to ramp up their on-demand delivery services, the pandemic has also spawned local smartphone delivery applications like OneCart and Bottles to take on Uber Eats and MrD. 

Massmart said its plan to purchase OneCart was part of its strategy to accelerate its e-commerce offering. Massmart said the negotiations were at “an advanced stage” and would likely be concluded in a few weeks. 

The Walmart-controlled group’s online sales across its different brands increased by nearly 59% in 2020, but that was from a small base. The acquisition of OneCart will give Massmart a bigger slice of growing online shopping share. 

In a report earlier this year, World Wide Worx said online sales in South Africa more than doubled in two years to R30,2-billion, with 66% growth in 2020. The number of online shoppers is set to grow to 33,4 million users by 2025, according to global research house Statista.

“The proposed acquisition is consistent with Massmart’s strategy to invest in and accelerate eCommerce growth, particularly in the fast growing on-demand delivery segment,” said Massmart chief executive Mitch Slape.

“A key objective going forward would be to invest in aggressively growing and fully supporting OneCart’s existing independent retailer marketplace model that enables consumers to order from multiple retailers via a single platform,” Slape said.

Started in 2017 in Johannesburg, OneCart allows users to shop from multiple stores with a single cart and delivery charge. It averages around 5,000 daily users. In the statement Massmart said OneCart had achieved year-on-year growth of 400% since inception. BM/DM