Online shopping platform Allsale Club has made its debut in the local e-commerce market, promising to offer international brands at significantly low prices.
Allsale Club is a subscription-based online department store that seeks to challenge the supply and pricing paradigm of SA’s online retail platforms such as Takealot, Bidorbuy and Zando.
The e-commerce site says it uses global sourcing to bring international brands, some of which are previously unseen in SA, to the local market.
Established by e-commerce veteran Justin Drennan and co-founder and CEO Michelle Lehrer, Allsale Club’s offerings range from everyday household items such as cleaning products, batteries and razors, to luxury items such as fashion clothing, cosmetics and watches.
Its co-founders have a proven track record in SA’s retail sector. Drennan is CEO and co-founder of outsourced warehouse management system for e-commerce firms, Parcelninja, and he also co-founded online shopping site WantItAll.co.za.
Lehrer has experience launching retail brands in new markets. Her retail career began at ALDO International in Canada, where she worked in corporate strategy, and she was previously GM of new business and strategic projects at Johannesburg-based distributor House of Busby.
Purchases on Allsale Club can be only be made by members, via a monthly membership fee starting at R79, with no contracts, lock-in periods or cancellation fees.
Lehrer explains the e-commerce subscription-based business model allows the company to offer goods at lower prices, as it operates on income from the subscription fee rather than on product mark-ups.
“Allsale Club works with suppliers around the world to bring more than half a million products to South Africans, many of which are not currently available on local shelves.
“We plan to disrupt retail sales in SA by using a business model which has flipped the switch on monetisation. Subscription-based models are changing business models from ones which rely on fluctuating sales, to ones which can predict income with reasonable certainty, by receiving a recurring payment at regular intervals for access to a product or service.”
Like global multinational US retail giant Costco, Allsale.co.za’s business model is driven by membership fees and not margins. It is premised on a focus on how cheaply it can bring goods to consumers.
This, according to Lehrer, means businesses benefit by being assured a predictable and constant revenue stream from their member base, reducing uncertainty and risks, while being forced to deliver value to members.
The online retailer offers 500 international brands currently not available in SA, and more than 250 in the cosmetics and hair care categories. While other items may already be available locally, Drennan points out members will benefit from everyday low prices without having to wait for sales or promotions.
“We stock a range of items from the US and Europe – brands which South Africans love, such as Nike, Fossil Watches, Tommy Hilfiger, Ray-Ban. All the top fragrance brands such as Dove, Gillette, are also imported. We also provide brands that South Africans are less familiar with, including Hudson Jeans, Joe’s, Too Faced, Nars and Aveda.”
According to an online retail research study conducted by World Wide Worx, South African online retail was expected to pass the R14 billion mark in 2018, marking 1.4% of total retail.
“It is not unusual to see growth rates of between 25% and 50% reported by individual local online retailers, with slightly more tempered expectations for 2019 and 2020,” noted the report, which was released in November 2018.
Allsale Club says it handles all import-related charges, including duties, and offers free returns.
“We believe we are launching at a great time for consumers, as value businesses thrive in a recessionary environment. We offer everyday value and everyday great prices. We want to build trust that our prices are always what members pay.”
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