Lynton Peters, front left, the founder and chief executive of OneCart, and Ariel Navarro, the co-founder and chief operating officer. Massmart is in talks to acquire OneCart. File photo.
Lynton Peters, front left, the founder and chief executive of OneCart, and Ariel Navarro, the co-founder and chief operating officer. Massmart is in talks to acquire OneCart. File photo.

Massmart in talks to acquire OneCart

By BR Reporter Time of article published Aug 25, 2021

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MASSMART has announced that it is in negotiations to acquire a controlling stake in OneCart PTY (Ltd) (OneCart).

On Friday, the company said the negotiations were at an advanced stage. It said the acquisition was in line with its strategic intent to accelerate growth in eCommerce.

The group hopes to conclude discussions in the coming weeks.

OneCart is a South African grocery delivery service that was founded in 2016.

Massmart Group chief executive officer, Mitch Slape said: “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. 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.”

In March, Massmart outlined the group’s immediate eCommerce priorities including to:

• Establish a unified group-wide eCommerce capability under the leadership of Sylvester John who has been seconded by Walmart to fulfil the role of Massmart Group eCommerce vice-president.

• Revamp the makro.co.za, game.co.za and builders.co.za online user interfaces, including key functionalities like search, to provide a more seamless and intuitive customer experience.

• Develop new transactional and value-adding mobile-first digital solutions that cater to different customer occasions, journeys, and segments, including participation as anchor retail tenant on the Vodapay Super App.

• Strengthen and expand order fulfilment capabilities such as on-demand and same-day order fulfilment, “ship to home” capability from Distribution Centres to supplement store fulfilment capacity, and improving the click-and-collect customer experience in stores.

Group vice-president for eCommerce Sylvester John said: “It’s clear that we have the brand recognition, geographical presence, merchandise assortment, procurement scale, and primary logistics capability to be an even more successful eCommerce player.

“In addition to better leveraging these assets, our immediate opportunity is to improve and expand our digital sales platforms and last-mile delivery capability. The successful acquisition of OneCart will go a long way toward achieving this.”

The company said that in 2020, online sales across Massmart increased by 58.6%, the number of unique eCommerce customers grew by 73% and click-and-collect orders increased by 69.5%. eCommerce contributed 1.8% of total sales, representing a significant increase over the previous year.

OneCart has achieved Year-on-Year growth of 400% since its inception.

Slape said: “Successful closure of the proposed OneCart transaction will contribute immeasurably to our centralised eCommerce capability that has specifically been established to concentrate scarce expertise, including Walmartpracticence, in a way that will accelerate the adoption of eCommerce best practise at Massmart."

BUSINESS REPORT ONLINE

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