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Cape Town – Naspers has signalled its intention to act more strategically in South Africa, when it pre-empted Kalahari’s value degrading and proposed to merge with takealot, an online analyst said.
World Wide Worx MD Arthur Goldstuck said 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.”
The size of the market of ecommerce and online combined was below R6bn in the last year. “If you take Kalarahi and takealot together they still probably only constitute 20% of that market,” he said. “So, even two of the biggest players make up a small proportion of a small market.”
The ecommerce segment consists of these main local players:
- General merchandise: takealot; Kalahari and Wantitall
- Discount goods and services: Groupon
- Design: Superbalist
- Flowers and gifts: Netflorist
- Books: Leisure books; loot
- Kitchen: Yuppiechef
- Fashion: Spree, Zando, Runway sale, Mr Price
- Beauty and grooming: Rubybox; Redsquare
- Babies and kids: Babygroup
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.”
By merging takealot and Kalahari, said Goldstuck, “you’re getting some scale as well as the tremendous flexibility and nimble nature of takealot to enable an established player to become more nimble”.
“Naspers has for quite some time had their eye strategically off the ball as far as Kalahari is concerned,” he said. “The change in thinking now with [Naspers CEO] Bob [van Dijk] is to look at it more strategically, as opposed to just relying on being the biggest and having this juggernaut that keeps rolling along.”
Listen to the full interview with Fin24’s Matthew le Cordeur and Goldstuck.
Listen:
- Fin24.
