Performance of HomeChoice digital sales is encouraging

HOMECHOICE International is encouraged by the sales performance achieved by its digital channel for the year to end December, with digital sales up by 40.3 percent.

The company wants to make further investment to grow this side of the business.

Chief executive of the South African operations, Shirley Maltz, said the group had delivered good growth across its omni-channel retail and digital financial services businesses. “Digital is our fastest-growing sales channel, up 40.3 percent for the year and now represents 12 percent of sales contribution.

Platforms

“Mobi is our customer’s preferred shopping channel, with 56 percent contribution to total digital sales. The business continues to invest in its digital platforms and introduced products which are only available online to positive customer response,” said Maltz.

HomeChoice International is an investment holding company incorporated in Malta and is also listed on the JSE. Through its operating subsidiaries, HomeChoice (Retail) and FinChoice (Financial Services), the group sells innovative home wares, apparel, personal technology, loans and insurance products to the rapidly expanding mass middle-income market in southern Africa.

Maltz added that HomeChoice’s financial services business was primarily a digital business with 64 percent of all transactions concluded on cellphones.

“Digital credit extended by both businesses now represents 28 percent or R846 million of total group credit extended,” she said.

In a weak trading environment where the group’s middle-income customers have been under pressure from high food inflation and transport costs, a weak job market and constrained access to credit, the group’s customer base increased by 10 percent in the past year to 744 000 which includes 57 000 customers in neighbouring African countries.

Customer growth in financial services was slower than retail owing to the impact of the affordability regulations. Sales outside South Africa represent 10 percent of business and the foreign customer base has grown by 14 percent over the past year.

On the year ahead, Maltz said the trading environment is expected to remain challenging and the unsecured lending markets constrained. “Our current credit lending criteria will be maintained and we will continue to focus on improving cash collections. We also plan to grow other revenue streams such as our insurance business to mitigate the impact of reduced interest rates,” she said.

In the results, the group reported revenue growth of 19.3 percent to R2.7 billion driven by strong retail sales and improved financial services loan disbursements in the second half.