E-commerce growth boosts Karooooo Logistics

Amazon had for years largely stayed away from heavily investing in the African market due to poorly developed infrastructure that would make it difficult to implement its famous next-day delivery service. 

“They didn’t want us to do Pick n Pay and Dis-Chem. They started putting up a lot of rules to us. So we told them, no, because we have all of these relationships. But over time, I think we’ll get that deal,” Calisto said. 

Even without Amazon, Calisto is happy with the progress that the company is making, fulfilling online orders for a number of large retailers. He is particularly bullish about the partnership with Pick n Pay’s delivery business.

“We’ve got Clicks, Dis-Chem, Pick n Pay … there’s about 10 names. And they’re all growing quite a lot, especially Pick n Pay. I believe it’s only a matter of time before Pick n Pay will beat [Checkers] Sixty60.”

In recent years Checkers Sixty60 has grown to become one of SA’s most popular e-commerce platforms, promising grocery shopping and delivery within an hour. 

While Karooooo was able to grow profits for the logistics unit by five times in the period, Calisto admits that this rate of growth is unlikely to remain at those levels as the business scales further. 

“We expect the growth rate to slow down. But even if it slows down to a fraction [of that] it’s still very high. We’re probably expecting growth well above 30% year on year,” the Karooooo boss said. 

The logistics business uses a crowdsourced driver network model made up of independent drivers, meaning it does not own the vehicles, much like Uber. 

When asked if Karooooo had appetite to have its own vehicles, Calisto said: “We’re not there yet and I don’t think we want to be there [for now]. Things could change in the future but at this stage, we just want to be a software platform.”


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *