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Seven insights into the heart of Naspers

Cape Town – Naspers CEO Bob van Dijk shared key insights with Fin24 on Tuesday into the success of Naspers [JSE:NPN] and the road ahead.

1. Cashing in on classifieds

“If I am not mistaken, we have eight businesses where we monetise and most of those are quite profitable or very profitable,” said Van Dijk. “We know what the model is, we know we need to get the scale. You can have good margins from it and in some markets we are already seeing that. In some markets we are in that investment phase and we have to get to that scale and that will require certain further investments.”

2. How Naspers responds to e-commerce disruptors

There are many disruptors in the world of e-commerce and online classifieds, he said. “We have competition certainly from people who are doing similar things as we are, but there’s also … a number of mobile-only propositions that are coming in e-tail and classifieds that we are watching very, very closely. In some cases we invest in those businesses ourselves and in other cases we take some of the learnings … and apply them in our offering.”

3. A different approach in Nigeria

“The Nigerian market is not as structured as a modern market, but it has a large population, it has very encouraging growth prospects, so we invest in classifieds,” he said. “We also are by now a majority shareholder in a business called Konga, which does pretty much what takealot.co.za does in South Africa in Nigeria and it does it really well.”

4. Video consumption on the increase

“Even in mature markets like the US, you see overall video consumption go up rather than down, you see linear TV shrinking a little bit, but connected video making up for more than that decline with overall consumption going up,” he said. “We will see that in all markets over time.” This is where DStv’s Box Office and Catch Up play a role, he explained.

5. Video entertainment an opportunity in Africa

Africa does not have enough access to video entertainment, said Van Dijk. “We have a great business in video entertainment, or Pay-TV, in Sub-Saharan Africa and the number of potential customers versus the number of customers suggests there is more to be done. Connected experiences are gaining traction and  people can get what they want, when they want it and will start consuming more, not less.” The growth of fibre optics will require Naspers to change in Africa. “It puts the onus on us to innovate rapidly and delivering (to) people excellent connected products.”

6. Consumers to benefit through DTT roll out

Regarding e.tv’s court case loss, which has opened the door to the roll out of digital terrestrial TV (DTT) in South Africa, Van Dijk said this will benefit customers the most. He said Naspers has good experience with the roll out of DTT through GoTV in Sub-Saharan Africa, “so, we’re reasonably well prepared to do a good job and deliver good products to customers”.

7. How Naspers executive, based around the globe, succeeds

The Naspers executive is based all over the world. Van Dijk is based in the Netherlands, chief finance officer Basil Sgourdos in Hong Kong and chairperson Koos Bekker in South Africa. “I had a bit of an assessment recently … and we found that in most months, we [Sgourdos and Van Dijk] see each other at least two weeks out of the month and very often three. I … spend between 75% and 80% of my time on the road and he does as well. We tend to be at the same places for the same occasions. I think of the core team, we travel together, even though we originate from different points. That works remarkably well. The sense of gravity with the company has always been with the operating units, it’s not with the headquarter.”

Watch the full series of interviews with Naspers CEO Bob van Dijk:

1. Discussing the Naspers year-end results

2.The rise of app stores

3. Cashing in on classifieds

4. The growth of e-tail and e-commerce

5. Why Media24 is in good hands

Core headline earnings for Naspers for the year ended March 31 2015 grew 30% to R11.2bn, while development spend investment increase 33% to R10.7bn, the JSE-listed company said in its results.

Naspers was trading 0.69% firmer at R1 908.00 in lunchtime trade on the JSE.

* Fin24 is part of Media24, a subsidiary of Naspers. Naspers has a 34% stake in Tencent.

* Comments will be moderated before appearing to encourage constructive debate.

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