Naspers’ Kalahari.com has agreed to merge with Takealot under the “Takealot” brand. Both companies agree this is one way they can survive the global competitive landscape with the likes of Amazon and Alibaba.
“After many years of losses on Kalahari and four years on Takealot, we realise we have to work together if we are to survive and prosper,” said Oliver Rippel, senior executive responsible for Kalahari.
“If you also take into account an uneven playing field against foreign operators who do not pay tax in South Africa, and the fact that high broadband costs are impeding the speed of growth in local online shoppers, combining forces gives us a better chance of success”.
Naspers has not succeeded in growing any of its local brands outside South Africa. It tried replicating Kalahari in Nigeria and Kenya but shut down operations after a couple of years. It has however now focused on investing in brands run by local entrepreneurs. One of such examples is Sim Shagaya and Konga.com which it has just invested some more money into.
Naspers stands to gain a lot by entering into this merger, so opines World Wide Worx MD Arthur Goldstuck. He stated in a recent interview with Fin24 that “what Kalahari has done is “pre-empt a time when it will start seeing its value degrade because of falling behind Takealot”.
“Kalahari has been on the back foot for quite some time and they’ve been battling for a good few years now in terms of growth, in terms of making an increased impact on the market,” said Goldstuck. “Whereas we’ve seen Takealot, from its arrival, being a significant growing player and one that is likely to overtake Kalahari in the next few years.”
According to Kalahari CEO Caren Genthner-Kappesz, Amazon has a large share of the ebook market in South Africa. “As a local player, we need to ready ourselves from increased competition from international players, but also the local brick and mortar stores who are increasingly operating online,” she said.
“If we don’t join forces we will have a tough time surviving in such a dynamic and competitive market. Together, we can focus our efforts on building a winning product and customer experience.”
This is a significant move for Takealot who recently acquired 100% of the equity of Superbalist.com, a design and apparel online retailer founded four years ago. In May, Takealot said it had raised $100m from Tiger Global management and revealed plans to play a much more aggressive role in South African e-commerce.
The merged entity would be managed by Takealot current CEO, Kim Reid together with co-CEO and chief technology officer Willem van Biljon.
According to Kim, “We are very excited about this transaction and the efficiencies and scale that it can generate for the merged business. We will continue to make sure that our primary focus is on the customers of the merged entity as they are the life blood of our business.”
