Wesfarmers announced plans to shut down its online marketplace, Catch, by the fourth quarter of the 2025 financial year. Increasing competition from international e-commerce giants like Amazon, Temu, and Shein has taken a toll on Wesfarmers Catch, forcing the company to focus on more sustainable ventures.
Figure 1: Wesfarmers CEO Rob Scott stated the closure decision aligns with shareholder interests, citing intense competition (Collected from: The West Australian)
From Success to Struggles
Catch began as Catch of the Day in 2006, founded by brothers Hezi and Gabby Leibovich. The platform quickly gained popularity, becoming one of Australia’s first successful online retail marketplaces. Wesfarmers acquired Catch in 2019 for $230 million, hoping to expand its footprint in the growing e-commerce sector.
Also Read: Katies and Mosaic Brands Store Closures: 480 Jobs Lost as Iconic Retailer Shuts Down
At its peak, Catch was valued at over $1 billion, riding high on the online shopping boom during the COVID-19 pandemic. However, after the initial success, the business failed to maintain growth amid the rise of global players like Temu and Amazon, which captured significant market share in Australia.
Figure 2: Catch started in 2006 as Catch of the Day, founded by siblings Hezi and Gabby Leibovich (Image: Catch/LinkedIn).
Financial Challenges and Mounting Losses
Despite its early promise, Catch Wesfarmers has struggled to deliver consistent profitability. The company reported losses of $88 million in 2022, $163 million in 2023, and $96 million in 2024. Analysts attributed these losses to intense price wars, reliance on paid customer acquisition, and competition from global retailers offering lower prices and faster delivery.
Wesfarmers Managing Director Rob Scott said, “There has been a significant increase in competitive intensity in the Australian e-commerce sector, which has affected Catch’s financial performance and growth prospects.” He emphasised that closing Catch was in the best interest of shareholders.
In addition to annual losses, Wesfarmers expects one-off costs of $50 million to $60 million to wind down Catch, not including an operating loss of $38 million to $40 million for the first half of the 2024-25 financial year.
Also Read: HSBC’s Failures Exposed: How Customers Lost $23 Million
Why Catch Fell Behind
Catch’s inability to compete with global players like Amazon and Temu significantly contributed to its downfall. Analysts noted that Temu and Shein, in particular, disrupted the market by offering ultra-low prices and a vast product range.
Industry expert Ben Gilbert highlighted that Amazon, Temu, and Shein collectively generated over $7 billion in revenue in Australia in 2024, overshadowing local players like Catch. He also noted that Catch relied heavily on paid advertising for customer acquisition, which reduced its profitability.
Investment manager Ray David pointed out that pure-play online retailers face challenges like intense price competition, dependence on search engines, and limited customer service. He described Wesfarmers’ decision as a sensible move, given the competitive landscape.
Impact of Closure
Wesfarmers confirmed that Catch would cease product sales on April 30, 2025. The company plans to repurpose Catch’s underutilised fulfilment centres in Sydney and Melbourne for its Kmart division. Currently running at less than 50% capacity, these centres will now support Kmart’s logistics operations.
Kmart Group Managing Director Ian Bailey explained, “Kmart Group can better utilise Catch’s fulfilment centres, which are currently less than 50 per cent utilised.” He added that the integration would enable faster deliveries to customers and reduce costs while alleviating pressure on busy Kmart stores.
Wesfarmers also intends to offer alternative job opportunities to Catch employees within its other businesses, where possible.
Gaining Digital Insights
While Catch Wesfarmers faced significant losses, Scott acknowledged that the business provided valuable insights into digital retail. Wesfarmers now plans to accelerate its digital transformation by expanding its retail media initiatives under the OneDigital division.
Retail media focuses on leveraging proprietary customer data to deliver targeted advertisements. This approach allows retailers to create additional revenue streams by capitalising on their existing customer base. Wesfarmers sees this as an opportunity to offset Catch’s losses and strengthen its position in the competitive retail landscape.
Future of Wesfarmers
Despite the challenges with Catch, Wesfarmers’ other businesses, including Kmart, Target, Bunnings, and Officeworks, continue to perform well. By repurposing Catch’s assets and leveraging digital innovations, Wesfarmers aims to enhance efficiency across its retail operations.
Bailey noted that integrating Catch’s logistics capabilities with Kmart would ensure faster deliveries and reduce costs. Meanwhile, Wesfarmers remains focused on growing its retail media initiatives to tap into new revenue streams.
Wrapping Up!
Catch’s journey from a pioneer in Australian online retail to a loss-making venture highlights the challenges of competing with global giants. Wesfarmers’ decision to close Catch Wesfarmers reflects the changing dynamics of the retail sector and the growing dominance of international e-commerce platforms like Amazon, Temu, and Shein.
By reallocating resources and focusing on digital transformation, Wesfarmers positions itself for a stronger future in the evolving retail market.
