[TOP STORY] MyRunway – ‘one of SA’s only profitable e-commerce sites’

SIMON BROWN: I’m chatting now with Rob Noble, MD at MyRunway. Rob, I appreciate the early morning. We chatted almost exactly two years ago – I think it was late 2020, and at that point of course we were in the depth of the pandemic. It’s two years later. Have you seen a growing up, a maturing and evolving of e-commerce in South Africa, partly because time passes, but also because of the pandemic and the lockdowns?

ROB NOBLE: Good morning, Simon. Yes, we have seen continued growth on our side since then. As a company we’ve definitely matured. I think the pandemic was very ‘good’ to us, as e-commerce exploded, I think, around the globe and in South Africa. Some of the platforms have plateaued a bit over this period as things have normalised, but I think there has been steady growth. I think the big game changer is going to be Amazon arriving next year, though.

SIMON BROWN: I’m going to get to Amazon in a moment. You say you say ‘plateaued’, but in a sense have we sort of plateaued at perhaps a higher level? I’ve bought things online that I would never have – shoes, clothes – which is exactly the space you’re in. In the past I went into a store; now I buy them on the internet.

ROB NOBLE: Sure. ‘Plateaued’ is all [relative], right? I think it’s compared to pre-pandemic sort of growth rates, it’s definitely higher than that. We’re consistently still in the double-digit growth numbers.

SIMON BROWN: You mentioned Amazon. The rumour is it is arriving sometime in Q1 of next year. Obviously it’s potentially a shake-up in our local market. The bigger picture, of course, is that it suggests that Amazon has looked at our market and said, hang on, here’s a big market, here is a mature market, here’s a space we can make money. It’s a stamp of approval for our local e-commerce folks such as yourself.

ROB NOBLE: Well, we like to think so, for sure. We’ve been around since 2012, so we’ve watched this industry grow and change over the last decade, and we’re still a long way behind where the international sort of e-commerce markets are.

I mean, you’ve got the UK at 30%, the US at 20%. I think China is actually pushing 50% of their retail sales through online. We’re sitting at just about 5% right now.

So even if we don’t reach the twenties or thirties and we get to 12% to 15%, that’s still sort of three times growth within the e-commerce market, and I’m sure that’s what they’ve spotted.

SIMON BROWN: Yes. [You said] 2012 – so you’ve been around for a decade. I think back a decade ago, I was still on ADSL [internet], fibre was just a dream, etc. In payment options, delivery – there really have been some massive changes in that decade. I mean, just small things like more and efficient delivery services and better ways of doing online payments.

ROB NOBLE: Sure. If you go now to the checkout on most e-commerce sites there are tons of different options. So it continues to evolve. I think our last mile delivery has matured as well. I think that was a real Achilles [heel] for e-commerce up to sort of three, four years ago, and I think the pandemic also sort of forced that to mature. Maybe that was what Amazon was waiting for – for all of these sort of things to fall in place before they came in.

SIMON BROWN: I take your point, and you’re right about that last mile. It has got way better. I’ve got a delivery tomorrow and they’ve booked a time slot. We’ll see if they arrive, but they’ve booked a time slot.

A quick last question. You sold a minority stake to [diverse trading entity] L.A. Group. We see this from time to time [with] South African businesses and we see companies sweeping in and taking stakes and again saying that actually we’ve got the ability and we are on the radar of the world.

ROB NOBLE: Yes, exactly …. The LA Group is an established retailer and its portfolio has expanded over the last few years. We’ve worked closely with them. It just made strategic sense for both of us, so when [R Peer] approached us at the beginning of the year, it was quite an easy decision, and strategically it just works. They get a stake in one of SA’s only profitable e-commerce sites; they get exposure to two-and-a-half million members and we get more support for … future tech development. We want to be ready for when Amazon arrives. I think there are going to be some big winners. So we want to make sure we well positioned for that.

SIMON BROWN: A quick last question. You mentioned ‘one of South Africa’s few profitable e-commerce sites’ – how long have you been profitable for?

ROB NOBLE: About a year-and-a-half now.

I think it’s quite a unicorn in this space to be a profitable channel.

And since 2020 a lot of the major retailers sort of woke up to the online game, whereas they’d kind of ignored it for a while – and they’ve been playing catch-up ever since, and it has been to varying degrees of success. I still think a lot of them struggle to get into that profitable space. It can be a bit of a black hole for investment in the tech or e-commerce space.

SIMON BROWN: Yes. And for you a year-and-a-half [of profitability]. So it was a long road – eight-and-a-half years to get to that profitability. I take your point about the black hole. Sometimes you wonder if you’ll ever get there.

Rob Noble, MD of MyRunway, I appreciate the early morning.

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