Karooooo continues to push its ambitions in Asia, recently opening a new business in Vietnam, a unit that founder Zak Calisto hopes will have gained traction in the next five years.
The group’s long-held view is that the Southeast Asia region can be its main driver of growth.
Valued at R24.9bn on the JSE, Karooooo is positioning itself as a leading global mobility software-as-a-service (SaaS) platform providing real-time data analytics to the transport and logistics sectors.
The SA business is the largest in a market where it has traditionally competed with Tracker SA, Mix Telematics and Altron’s Netstar. The group is working to extend its mobility business using data analytics and artificial intelligence (AI).
Based on this, the group recently started operating in Vietnam, and while the unit is a small one, Calisto told Business Day he is expecting it to grow.
“We’re only starting now, so it’s a very small business but I’m very excited about the opportunity.
“We’re still building out our team and it will take up a bit of time but it should be as good as Thailand, the Philippines or Indonesia. We just need to build it up,” said the CEO.
Calisto was speaking as Karooooo registered another quarter of growth in subscribers and revenue.
Cartrack subscription revenue growth in Southeast Asia accelerated to 30% in the first quarter to May.
“SA, which has been running for 20 years is about four times the size of the Asia operation. We’re already 25% of SA [in Asia] and growing much faster. SA is growing at mid-teens and Asia is growing at 30%. If you compound that over 25 years, you’ll have a very different Asia compared with SA,” he said.
The group was founded by Calisto in 2004 and is listed on the JSE and Nasdaq.
“We’ve been doing this for two decades, and we’re just doing what we’ve always done. We’re not reinventing the wheel. We know what to expect when we enter a new market. We know that to get the initial people that are right, it takes a long time. It’s a trial and error process,” he said.
“I’ve learnt over time that to build a really good business takes 10 years and up to three years to gain reasonable traction.”
Karooooo is the largest player in its market in Singapore, a country where it began operations in 2015.
“If you look at a country like the Philippines that we’ve been running now for five years, it’s now profitable and adding a lot to our bottom line. If you look at a county like Thailand, we’ve been running now for six years. That business is now highly profitable, contributing a lot both to our top line and bottom line,” said Calisto.
Indonesia from last year started to contribute towards the group’s bottom line. That business is in its fifth year of operation.
Calisto said the first three years were always tough. The biggest fight was finding the right people to help set up and grow the business.
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