South African click-and-collect firm Pargo considers continent-wide expansion
Updates to add details on Egypt pilot
By Nqobile Dludla
JOHANNESBURG, Oct 18 (Reuters) -South African click-and-collect company Pargo is exploring an expansion into the rest of Africa, its CEO said in an interview, betting on e-commerce growth on the continent.
Africa is forecast to surpass half a billion e-commerce users by 2025, having shown a steady 17% compound annual growth rate of online consumers in the market, according to the International Trade Administration, a U.S. government agency.
This growth is driven by increasing internet penetration, smartphone adoption and the growing use of digital financial services, especially mobile money.
"We're looking at an expansion strategy to move into multiple markets. We are operational with a pilot in Egypt as a second country, but we are quite seriously looking at, in the future, building a network across Africa," Pargo CEO and co-founder Lars Veul told Reuters.
The firm has more than 4,000 pick-up points located at retail stores across South Africa, including informal township "spaza" corner shops.
Veul said the options would span the main economies in Africa.
"We don't know exactly yet. So, it's more about the countries where e-commerce is booming or expected to boom."
The expansion will also be driven by following its existing clients into countries where they operate outside of South Africa, Veul added.
In Egypt, Pargo has been testing the market since last year with 150 pickup points, also trying to see whether the company can make it work operationally, Veul said.
"Additionally, we have had to create a payment solution as 80% of payments in the Egyptian market happen with cash."
Veul, a Dutch citizen who moved to Cape Town in 2012 from Amsterdam to help set up online marketplace Groupon in South Africa, said he co-founded the company in 2015 after realising last-mile delivery was a serious challenge for e-commerce businesses on the continent.
Pargo has partnered with major listed telecoms, banks and retailers including U.S. e-commerce giant Amazon AMZN.O, which launched in South Africa in May this year. Amazon's customers collect their goods at Pargo's pick-up points.
Click-and-collect allows shoppers to avoid delivery costs and the agony of waiting for the delivery, while also lowering last-mile delivery costs for companies.
Reporting by Nqobile Dludla; Editing by Jamie Freed and Tomasz Janowski
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
