74 / 280
72
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
OPERATIONAL OVERVIEW
OVERVIEW
As the leading distributor of prepaid airtime and
prepaid electricity in South Africa and with a growing
suite of products and services, this segment is well
positioned to supply its customers with those needs.
Distribution capabilities range from independent
shops, petroleum forecourts, spaza shops and Mom &
Pop stores, through to the multi-channel retail chains.
In this way, the Group enables consumers to interact
and transact on an equal footing.
Critical to growth is the expansion of supply to
targeted rural and urban market, aligned to the
Group’s strategy of managing “the last mile” of the
distribution channel. This is aimed at deepening
penetration in their respective markets where, over
the past year, further investment has been made.
The informal sector generates approximately 85% of
SA Distribution’s revenue. Services to rural areas are
via an expanding fleet of trucks accompanied by foot
soldiers. In this direct distribution model, innovative
transactions and incentives can be implemented,
value is added directly to the consumer and, as a
consequence, solid relationships are established
with merchants.
This business segment distributes prepaid products and transactional
services to the South African wholesale and retail markets, covering
a diverse distribution footprint, and reaching all LSM groups. The
product range now includes four categories of goods and services
– prepaid airtime and starter packs, prepaid electricity, event and
transport ticketing, financial services and merchant acquiring.
The segment contributes 98% to Group revenue.
The remaining 15% of revenue is derived from the
formal sector. In respect of retailers, the Group manages
the front-end of their businesses, thereby ensuring that
the full suite of Blue Label products and services is
available to consumers at these outlets. Distribution to
urban merchants continues to be expedited through the
Group’s proprietary technology platforms.
The trend in consumers opting for “PINless top-ups”
as an alternative redemption method for prepaid
airtime, continues to escalate. During the past year
sales by these methods increased from R997 million
to R1.7 billion.
Blue Label’s widespread network of point-of-sale
presence enables it to reach out to consumers every
day and everywhere across South Africa, in offering
its categories of products and services.
AIRTIME
SOUTH AFRICAN
DISTRIBUTION