Mega-merger, which is subject to approval by the competition authorities, will create an e-commerce powerhouse in South Africa under the Takealot brand.
Two of South Africa’s largest online retailers — and longstanding adversaries — have agreed to merge.
Kalahari.com, owned by JSE-listed media and e-commerce group Naspers, will be folded into Takealot.com, the e-retailer that recently secured US$100m from investment firm Tiger Global Management.
ONLINE retailer Kalahari.com said on Tuesday it would merge with competitor takealot.com, in a move that is driven by the fact that, without scale, South African online retailers “simply can’t compete successfully” against local brick and mortar retailers and foreign companies such as 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 SA, 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,” he said.
Online retail only accounts for about 1.3% of the total market for consumer goods in SA. The channel has great upside potential when one considers that in developed markets such as the US and the UK online retail accounts for as much as 14% of total retail of consumer goods.
The merger will offer customers the benefit of a wider selection of products and categories, as well as broader delivery services. The merged entity under the takealot brand will be managed by takealot CEO Kim Reid together with co-CEO and chief technology officer Willem van Biljon.
The merger is subject to approval by the Competition Commission. The businesses will continue to trade separately and provide services to their customers as usual through the festive season.