Naspers is bullish about the future of online retail business in SA, with the group saying its investing for growth in a market where it faces growing competition by international players.
“Takealot has to be the winner in SA,” Naspers CEO Fabricio Bloisi told Business Day. “We were here first. We are the SA company. We are big. We are strong. We have smart people and we are here for the win”
“But, at times, we didn’t have the internal knowledge to compete against other companies as good as us,” Bloisi said.
Founded in 2011, Takealot — now made up of takealot.com and food delivery business Mr D Food — is the largest e-commerce business in SA. It accounted for about 2% of the overall retail market, which is dominated by brick-and-mortar outlets such as Shoprite and Mr Price.
In recent years, the group has take a hit, mainly in Superbalist, which it has now sold. In March, Takealot indicated it was looking to sell the unit as it faced mounting competition from online, China-based retailers Shein and Temu, which have disrupted the local online fashion market in the past two years.
In September, Takealot sold Superbalist to a consortium of retail and private equity investors led by Blank Canvas Capital.
With that done, the group says its strategic investment “ensures positioning for future growth, post the sale of Superbalist,” with Bloisi sounding excitement about its prospects.
“We’ve done many interesting things and I’m quite excited about Takealot now. We talk much more now about being the best in the world. We need to move faster in technology.”
Last month, Takealot opened a large new distribution centre in KwaZulu-Natal to bolster its network capability in SA. The facility spans 43,000m2 and is equipped to ship up to 45,000 units a day.
Bloisi said the group was doing more work to share knowledge across companies in its portfolio as part of the strategy.
“For example, we took lots of knowledge from Brazil, India and Europe, and gave it to Takealot in terms of culture, logistics and technology. We did workshops, we had people from SA travel abroad and the people from those countries travelled to SA, so they could share what they do best and what they need to improve,” he said.
“The result in my opinion is Takealot is moving faster, Takealot is preparing itself to have the same set of best practice that we have in our best companies. I think this is [even] more valuable than investing money in the business. I’m confident and happy with Takealot’s improvements over the last of say two to three months. This is just the start, we will have many more improvements over the next months.”
This comes as the group reported revenue for Takealot grew 7% in the six months to September from $315m to $350m compared to the same time last year. Adjusted earnings before interest, tax, depreciation and amortisation (ebitda) fell by a third, going from $18m to $12m.
Its gross merchandise value (GMV) was down 1% year on year to $746m, while it was up 11% in local currency, excluding any merger and acquisition activity.
Takalot.com’s GMV was up 10% year on year, while Mr D was up 13%. Takalot.com currently has 17,136 drivers, with 7,772 employees on its books.
The launch of Amazon.co.za — the online giant’s SA store — had been widely seen as a direct challenge to reigning champion Takealot, which has the backing and deep pockets of its parent. Naspers is a top-10 global tech investor alongside Facebook, Google and Amazon.
While much of the attention surrounding Amazon in SA has focused on its competition with Takealot, Shein and Temu had already cemented their place in the market.
To level the playing field with local retailers, SA authorities said recently they would add a 45% duty plus VAT to small batches of retail goods imported from China. This will substantially raise the costs of buying from Shein and Temu.
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