SOUTH AFRICA – The Shoprite Group through its on demand one-hour grocery delivery service, Checkers Sixty60, has entered into a joint venture with its existing logistics partner, the RTT Group to strengthen its e-commerce delivery capabilities.
Under the agreement, RTT Group’s on-demand business will be transferred into the new company in which Shoprite Checkers will subscribe for 50% of the issued ordinary shares.
The transaction follows on from the rapid growth of Checkers Sixty60 in which RTT On-Demand has played a pivotal role in last-mile logistics, currently boasting of over 2 million app downloads.
In addition, the move comes as Covid-19 has accelerated online shopping with more people preferring to shop from the comfort of their homes.
But the boom has strained the capacity of even the largest retailers, forcing them to invest and make e-commerce acquisitions to improve wait times and services, complementing scheduled delivery and click-and-collect services with on-demand delivery.
Going forward, the joint venture will advance the technology, learnings and intellectual property created to date as well as enable continued development in the digital and customer experience in line with Shoprite’s ecommerce plans.
“This transaction is in line with our digital strategy. Owning the last mile home delivery aspect of our Sixty60 service is an important part of building out our digital ecosystem for customers.
“We consider the combined capability we have built with RTT to be a critical competitive advantage and key to Sixty60’s rapid growth.
“This RTT On-Demand joint venture will allow the Group the opportunity to continue enhancing our order fulfilment and last-mile delivery capabilities whilst giving us the opportunity to grow our precision retailing efforts for our customers,” said Shoprite Group CEO, Pieter Engelbrecht.
Shoprite group has further highlighted that the creation of this joint venture company was significant in terms of the evolution of Shoprite’s strategic roadmap specifically where it pertained to on-demand and e-Commerce.
Through its newly launched ground-breaking digital business hub, ShopriteX which is combining data science, technology and innovation, has enhanced customer experiences.
Going forward, the RTT On-Demand joint venture will allow ShopriteX the opportunity to continue to evolve the digital experience and in doing so ensure best in class service levels for its customers are maintained.
RTT Group CEO Gavin Rimmer commented, “RTT’s continued relationship with the Shoprite Group brings sustainable scale, capability and technology development to RTT’s e-commerce fulfilment plans.
“It also provides customers with access to an extensive geographic network and range of service options for their on-demand needs.”
It is anticipated that the transaction will add to the more than 4,000 jobs already created by Sixty60 as it continues to grow in the communities in which it operates.
“The benefits arising from formalising this relationship with RTT On-Demand should extend beyond our customers to also include our employees, suppliers and shareholders and we are incredibly pleased to be moving forward with our e-commerce plans on this basis,” added Pieter.
The transaction is subject to the fulfilment of both commercial and regulatory conditions and includes RTT’s On-Demand technology platform, management and operations teams.
Meanwhile, former Shoprite Chair Christo Wiese has secured 20 000 single stock futures contracts on the open market worth R414m of the retail group’s stock, an indication of his continued interest in the company.
Wiese, who retired as chair of the group after 40 years in 2020, remains a non-executive director and made the purchases through a company he controls, Toerama.
At the end of Shoprite’s 2021 financial year, Wiese held 63.1 million shares in the group through various entities he controls, equating to 10.7% of the group.
This makes him the second-largest shareholder after the Government Employees Pension Fund (through the Public Investment Corporation) with 15.5%.