December 2, 2003

By Vera von Lieres

Cape Town - More than three years after they were officially launched, online retailers Pick 'n Pay's Home Shopping and Woolworths' inthebag have not experienced any fireworks but, instead, can boast steady growth.

Pick 'n Pay launched its new Home Shopping site in conjunction with M-Web after a two-month trial period.

Executives at the time declined to put a figure to the possible contribution to earnings from the online venture over a five-year period but chief executive Sean Summers pointed out that it was a medium- to long-term investment for the group.

Deon de Lange, the general manager for Pick 'n Pay Home Shopping, said last week that the site now had 90 000 registered users, of which 24 000 shopped regularly.

"Ideally, we would like to get 50 000 of those 90 000 people as regular shoppers."

The average basket spend had risen to about R980 from about R780 two and a half years ago, while the customer profile had remained consistent with professional working women, many of which were mothers, making up the bulk.

While the venture was not yet making any money, it was projected to break even by about 2005 depending on the success of the current financial year. "Over the past year, we halved our losses. We will see what next year brings," De Lange said.

Online retailer inthebag, taken over by Woolworths from Wooltru about two years ago, had consistently met its budget plan over the past year, said Audrey Briel, the head of the venture.

The grocery portal had a registered subscriber base of nearly 56 000, of which about 17 000 shopped regularly. 

Briel declined to give numbers for the average basket size but said it was growing. After starting off with fresh fruits and vegetables, prepared meals, groceries and toiletry brands, the focus had expanded to include gifts, which was a key growth area. Here, a feature was that younger people living overseas were buying gifts online for people at home.

"The clothing and home side, introduced last August, is also growing nicely," Briel noted. Similar to Pick 'n Pay, inthebag's customer profile was mainly professional working mothers who had "no time".

Within the context of the greater Woolworths group, inthebag formed part of the "convenience offering" of the food and clothing retailer, much like the smaller Woolworths food stores countrywide.

Overall, Briel believed there was now much less of a hype around e-commerce compared with three to five years ago and a more realistic view about what to expect from this area of business.

De Lange noted that while Pick 'n Pay Home Shopping was small within the group from a sales point of view, strategically it was an important customer service.

The food retailer's online portal was gearing up to launch a general merchandise section, focusing on music, movies, DVDs as well as stationery and toys.

Woolworths' and Pick 'n Pay's online shopping sites are the most prominent among top retailers. But independent grocery store Thrupps in Johannesburg has muscled in and is proving a popular online portal.

Pick 'n Pay Stores ended 30c up at R15.70 yesterday, while Woolworths gained 15c to close at R7.64.