Kalahari, Takealot to merge

2014-10-07 12:26

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Kalahari and Takealot, two of the leading general e-tailers in South Africa, have announced that they are merging their operations.

The move was driven by the fact that, without scale, South African e-tailers simply can’t compete successfully against the 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 South Africa, 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”.

Online retail only accounts for approximately 1.3% of the total market for consumer goods in South Africa. The channel has great upside potential when one considers that in developed markets such as the United States and the United Kingdom online retail accounts for as much as 14% of total retail of consumer goods.

The merger will bring customers the benefit of a wider selection of products and categories, as well as broader delivery services.

“We are very excited about this transaction and the efficiencies and scale that it can generate for the merged business. We will continue to make sure that our primary focus is on the customers of the merged entity as they are the life blood of our business,” said Takealot’s chief executive Kim Reid, who will manage the merged entity under the Takealot brand together with co-chief executive and chief technology officer Willem van Biljon.

The merger is subject to Competition Commission approval and will only become effective once the commission has ruled.

The businesses will continue to trade separately and service their customers as usual through the festive season.

Takealot.com was officially launched in June 2011 after the successful acquisition of an existing e-commerce business called Take2 by the US-based investment firm Tiger Global Management and Kim Reid in October 2010.

Today takealot.com is one of the fastest growing, most innovative e-commerce retailers on the African continent.

Established in 1998, kalahari.com is one of South Africa’s largest online retailers, selling millions of books, e-books, e-readers, music, DVDs, games, cameras and electronic goods.

A pioneer in the South African e-commerce industry, the company offers unequalled customer choice and service with top-selling products available on 24-hour delivery, various payment options, door-to-door delivery, wish list facilities, vouchers and free delivery on orders over R250.

» Kalahari.com is a part of Naspers, the owner of Media24, City Press’ parent company.

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