South African e-commerce giant Takealot has achieved its first annual operating profit in its 15-year history, a significant turnaround attributed to a strategic blend of operational enhancements and an embrace of Chinese sellers. However, this milestone is underscored by a complex regulatory landscape and internal caution from its parent company, Naspers.
Naspers announced on June 29, 2026, that Takealot recorded an adjusted operating profit (aEBIT) of $11 million for the fiscal year ending March 2026, a substantial improvement from the $13 million loss reported in the previous year. Revenue climbed 18% to $1 billion, with Gross Merchandise Value (GMV) reaching $2 billion. The core Takealot.com platform generated $906 million in revenue, serving 6.2 million active customers and processing over 60 million orders, complemented by the Mr D food-delivery service and the Takealot Fulfilment Solutions (TFS) logistics arm.
This achievement arrives amidst intensified competition. Amazon launched its South African marketplace in May 2024, bolstering its Prime subscription service with competitive delivery pricing and a commitment to sourcing over 60% of its local catalogue from South African small and medium-sized businesses. Concurrently, Chinese platforms Shein and Temu have made significant inroads, reportedly generating approximately 7.3 billion rand in sales in 2024, capturing over a third of South Africa’s online apparel market. Rather than engaging in a price war, Takealot has strategically integrated elements of its competitors’ models.
Despite the headline profit figures, the Naspers board maintains a degree of caution. The reported aEBIT and aEBITDA (up 86% to $78 million) are non-standardised, adjusted metrics used internally for executive compensation and dividend policy, excluding certain charges and thus not directly comparable to IFRS-compliant results. True profitability under International Financial Reporting Standards (IFRS), pre-tax, reportedly swung from a loss of approximately 214 million rand to a profit of about 181 million rand.
More telling is Naspers’s decision not to reverse a 5.9 billion rand impairment previously taken against Takealot. The residual goodwill on the balance sheet stands at a modest $51 million, and the company employs post-tax discount rates of 17% to 21% when valuing the business, indicating continued conservatism regarding future projections. This suggests that even a profitable year has not fully restored Naspers’s valuation of the business to its previous levels.
The operational drivers behind Takealot’s improved margins are multifaceted. Naspers attributes the gains to a shift towards higher-margin product categories, growth in on-platform advertising (retail media), and the TakealotMORE subscription service, which now accounts for 27% of Takealot.com’s GMV. Furthermore, the TFS logistics business experienced substantial growth, with revenue nearly doubling (+93.5%) as Takealot leveraged its warehouse and courier network for third-party rentals. This strategy, focusing on loyalty programmes, advertising, and monetising logistics infrastructure, closely mirrors Amazon’s approach. The onboarding of Chinese sellers broadens the product catalogue and aids customer retention, but the primary profitability engine lies in these high-margin services.
This strategic pivot creates a significant paradox, particularly in light of South Africa’s recent customs reforms. Since July 1, 2024, the South African Revenue Service (SARS) has eliminated the preferential tax regime for low-value parcels. The previous concession, which allowed shipments under 500 rand to enter with a flat 20% duty and no VAT, has been replaced by standard 15% VAT on all imports, in addition to applicable customs duties. This change, now permanent under the 2025 draft tax bills, aims to level the playing field for local retailers who have historically faced duties up to 45% plus 15% VAT, while platforms like Shein and Temu exploited thresholds.
The economic implications of this policy are substantial. A study commissioned by the Localisation Support Fund (LSF) estimates that Shein and Temu have cost South Africa over 8,100 potential jobs and currently account for 37.1% of the online market for clothing, textiles, footwear, and leather. Without intervention, job losses could exceed 34,000 by 2030.
Yet, Takealot’s path to profitability involves integrating the very Chinese merchants that the state is attempting to regulate. This creates a direct conflict: the government imposes taxes on cross-border Chinese parcels to protect domestic industries, while Takealot, a national champion, incorporates these low-cost vendors into its marketplace. South African merchants, ostensibly the beneficiaries of the customs reform, now face direct competition within Takealot’s platform. Moreover, Takealot assumes reputational risk for product quality, delivery issues, or counterfeit goods originating from third-party sellers, impacting its brand equity for margins it only partially controls.
This trend is not unique to South Africa. Jumia, another prominent African e-commerce platform, has adopted a similar strategy. After years of losses, Jumia has shifted its focus towards lower-income consumers and has significantly increased its reliance on Chinese sellers, opening a sourcing office in Yiwu. The company is targeting profitability in 2027 and has recently exited markets like South Africa, Tunisia, and Algeria, reflecting an efficiency-driven approach.
The convergence of these African e-commerce leaders suggests a common strategic conclusion: success against Chinese marketplaces is being achieved not by building superior platforms, but by leveraging the same supply chains. This represents a rational commercial response for investors but highlights a critical policy blind spot. The initial vision for African e-commerce was to foster local supply chains, create jobs, and bolster domestic industries. Instead, national platforms are increasingly becoming conduits for Chinese goods, even as governments implement measures to curb such imports.
Several factors will determine the sustainability of Takealot’s profitability. Intensifying price competition from Amazon Prime remains a significant threat, and Naspers’s cautious valuation signals ongoing concerns. The ultimate impact of SARS measures on Chinese import flows is yet to be fully assessed, given potential logistical workarounds. Furthermore, the inherent challenges of quality control and after-sales service associated with low-cost imports will eventually test the customer trust that has been Takealot’s cornerstone for fifteen years. While profitability has been achieved, its long-term foundation remains under scrutiny.
... Takealot’s Profitability Paradox: Navigating Chinese Supply Chains Amidst South African Tax Reforms ... Naijaonpoint.