Massmart adds to (One)Cart

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Massmart adds to (One)Cart

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Published Date: 2021-10-07 | Source: INCE|Community | Author: The Finance Ghost

Massmart adds to (One)Cart

Massmart first hinted at a deal with OneCart in a cautionary announcement in August. Convenience and on-demand shopping has been all the rage over the past year, so Massmart is late to this party. Better late than never, I suppose.

The only real chance that Massmart has of competing with the likes of Takealot is by improving the online offer significantly. The queues at Makro are the stuff of legend, so I can easily see a world where Massmart boosts sales by offering more effective order fulfilment than has previously been the case.

My absolute low point was in the first lockdown when we ordered household goods from Makro. Many days later, a truck eventually arrived at the house. It had one bottle of Handy Andy in it. Literally, one bottle. Even the driver was in disbelief at what was going on.

That was then and this is now. Massmart will take an eventual 87.5% stake in OneCart. This will take the form of an unsecured convertible loan and an acquisition of shares from existing shareholders. The founder of OneCart, Lynton Peters, will hold the remaining shares along with another minority shareholder.

OneCart follows an independent retailer marketplace model, in which the shopping interface gives shoppers access to goods from various retailers. In other words, you could use the app to buy goods from Woolworths, Pick n Pay and Dis-Chem, among others.

This is a significantly different model to Sixty60 (Checkers only) or Bottles, which was rebranded to Pick n Pay asap! after it was acquired by that retailer.

Massmart has committed to maintaining the existing model, while improving its on-demand offer through the interface. I'm not sure how that strategy will play out in real life, as Massmart will surely want to prioritise its own products on the app.

The deal price has not been publicly announced.





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