Kalahari, Takealot to merge

Mega-merger, which is subject to approval by the competition authorities, will create an e-commerce powerhouse in South Africa under the Takealot brand. By Duncan McLeod.


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.

The value of the deal has not been disclosed. Under the deal, Naspers will acquire shares from Tiger Global such that the two companies have an equal shareholding in the merged business. They will each hold about 41% of the equity.

The proposed merger is subject to Competition Commission approval and will only become effective once the commission has ruled, the companies said in a joint statement.

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

“The move was driven by the fact that, without scale, South African e-retailers simply can’t compete successfully against the local brick-and-mortar retailers and foreign companies such as Amazon and Alibaba,” the companies said in the statement.

“After many years of losses on Kalahari and four years [of losses] 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.”

The companies said online retail accounts for only 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 like the US and the UK online retail accounts for as much as 14% of total retail of consumer goods.”

“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 CEO Kim Reid.

Takealot CEO Kim Reid

Takealot CEO Kim Reid

Reid will manage the merged entity under the Takealot brand together with co-CEO and chief technology officer Willem van Biljon.

Van Biljon, who co-founded Mosaic Software and who was one of the leaders who built Amazon’s EC2 cloud service, joined Takealot in June.

The deal with Kalahari comes just six week after Takealot announced it had acquired 100% of the equity of Superbalist.com, a design and apparel online retailer founded four years ago. According to Takealot, the acquisition would allow it to target “millennials”.

In May, Takealot said it had raised $100m from Tiger Global management and revealed plans to play a much more aggressive role in South African e-commerce.

“We have agreed on the capital expansion and the money has been raised and we are now funded to grow as we choose,” CEO Kim Reid told TechCentral in an interview at the time. Tiger Capital took control of Takealot, then Take2, in 2011.

Reid said Takealot had enjoyed growth in excess of 100%/year and wanted to “increase that growth rate”.

“If you look at the size of the market right now, there is a R550bn opportunity in which e-commerce is only just beginning to play a role,” he said.  — © 2014 NewsCentral Media

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  • Resit Ray Asiroglu

    Takealot’s customer service excellence will now be negated by Kalahari’s incompetence and disregard for customer rights.

  • Hawk

    If you read the article, Kalahari are folding INTO Takealot – meaning the Takealot brand remains. I’m sure that they’ll take a while to find their feet including the logistics and operations hurdles they’ll have to merge and overcome, but let’s be positive and hope that this will do good things for eCommerce in SA!

  • takeahari dot com anyone?

  • LlewellynKriel


    It’s not as if online shopping is all that attractive in SA anyway given the high prices, non-existent local manufacturing base, abysmal service ethic and rampant corporate greed. The argument about foreign suppliers is pure specious nonsense as anyone who buys via Amazon or Xlibris will tell you. The 10-to-1 exchange rate ensures that. Now the last remaining price-competitive element goes and we’re all lumped together with the exorbitant likes of Exclusive Books, Zando, Woolworths, Dion-Wired, Incredible Connection and the rest.

  • Greg Mahlknecht

    Actually it’s not. I buy a lot at Amazon and eBay because even with the exchange rates and import duties there are many items which are still a lot cheaper to import rather than buy locally.

    The 10-to-1 exchange rate is irrelevant, as the retailers are subject to the same issue!

  • Dave Baker

    Well all that doesnt necessarily follow.
    What we know is that 2 of Takealot’s Exec Management will remain in place. Also the brand will be Takealot

    With a merger the Exec get to assess the best of both worlds and decide on location, platform, logistics, distribution etc.

    What they will choose from where? I doubt that is 100% decided

  • Loman

    The old ice cream and excrement analogy applies well here.

    For those that don’t know it, i’ll explain.
    Ice cream is nice to eat, excrement is not
    If you add a little ice cream to excrement, there is basically no change as you still would not want to eat it.
    If you add a little excrement to Ice cream, you contaminate the whole thing and it ends up inedible as well.

    In this case Takealot is the ice cream and kalahari is the excrement.
    Even a little of kalahari’s way of doing things could hurt takealot tremendously.

    Also, Mr Reid, if you wanted your company to continue with its 100% growth rate, why FFS would you even contemplate merging with kalahari?

    The difference between Takealot and Kalahari is like night and day, Are we now forever doomed to live in dusk?

    Loot.co.za here I come. Or raru.co.za
    But loot’s prices are better

  • Loman

    We still have loot.co.za and raru.co.za
    Loot is even cheaper than takealot on some electronic items as well as almost all books.

  • Greg Mahlknecht

    I don’t get the Kalahari hate – I buy a lot from both Takealot and Kalahari; they both have good and bad points. Takealot wins in after sales service (MrD makes returns a joy), but Kalahari wins in stock logistics (more likely to have stuff in stock) and discovery (search, browse). It’s a draw on shipping, turnaround time and price. If they can take the best from each site, that would be a good thing.

  • Greg Mahlknecht

    They said that about Afrihost when MTN bought a controlling interest. It clearly never happened, in fact as a customer of them, I’d say that Afrihost has improved since.

  • Dave Baker

    If you think Takealot is better than Kalahari in all aspects then I doubt you are being objective
    – Search and stock levels are better on Kalahari.
    – Quite a few things are much of a muchness
    – Takealot is better in some ways as well

  • Loman

    I suppose it all depends on what you order. The few times I did order from Kalahari they managed to stuff up my order completely.
    Items arrived broken and delivery was sometimes up to two weeks late.
    I order the majority of my stuff from Takealot mostly due to their cheaper prices, superb customer service, very quick delivery. Not to mention that if an item is faulty their return and refund system is flawless. What takes 6 weeks or more at kalahari.com or Loot.co.za takes takealot less than a week.

    Last week ttakealot sent me the wrong size Solid State Drive and I received the replacement 2 days before the couriers came for the pickup of the wrong drive. I’m not sure if that was a fluke or if they looked at my track record and thought they could trust me.

    Either way, takealot strives for superb customer service. The same simply cannot be said for kalahari.

    Regarding your point about Kalahari stock logistics. In the last year I’ve only bought roughly about 6 items from kalahari, mostly books, dvd etc. I’ve come to the conclusion that they have no idea what they have in stock as many times I had to wait ages. It felt like it was shipped from UK or USA. That is how long it took. In stock my @$$

    But you might read different books than me, so your results may vary.

  • Loman

    Perhaps not in all aspects, but Takealot excel in all the aspects that matter most to me.
    Shipping- lightning fast,- far better than kalahari.

    Prices – on average the stuff I order is cheaper at takealot

    Range – If I were only interested in reading books; watching movies and listening to music then perhaps kalahari would be best, but the vast range of things available at Takealot is massive. I bought anything from microwaves to computer components at Takealot, Even Laminators and Heavy duty staplers, all at great prices.

    Return and refund – Fast, effective and absolutely beyond a doubt the best.

    And the best for last:
    Service with a smile – They have the best customer service in the industry.

    So to sum up: They are not perfect, or better than kalahari in all aspects, but they do come pretty darn close. As close as humanly possible.

    Edit: I must admit that Takealot seach does suck, but that is why I use Google Advanced Search.

  • Dave Baker

    Thanks for adding the objectivity
    For me
    – Price a toss up
    – Delivery a toss up. – TAL has messed up a few times but they have surprised me with same day delivery
    – Stock level accuracy – KAL more accurate. With TAL I have sometimes gotten calls saying, sorry out of stock
    – Range -esp stationery – no argument.
    – Returns and customer service – Never had to call either.

    So I do horses for courses.
    I check both and make a decision based on price, availability and turnaround

    The merger saves me checking both…

  • Loman


    You should add loot.co.za and raru.co.za to your list of sites to compare prices. Loot is quite good, but their return and refund policy is only slightly better than kalahari. So far so good.

  • Loman

    “If” they can take the best from each site. I do hope they can. But I find that unlikely.

  • Greg Mahlknecht

    Two posts ago you loved Takealot and sang their praises. The chap that brought you that is in charge of this new venture, why did you stop trusting him? Just curious.

  • Loman

    Because kalahari will be involved. Simple as that.

  • Greg Mahlknecht

    Okay so then blind fanboyism. Nuff said.

  • Loman

    I’m far from a takealot fanboi.
    If you read my other posts you would see I prefer Loot.co.za, raru.co.za more than kalahari as well.

    if another company comes along tomorrow that provides a better service than takealot, i’ll use that in a heartbeat.

    But at the moment the only 2 really big sites are takealot and kalahari. If they were to merge, well then gone is the competition.

    That is why I don’t want them to merge, not because i hate kalahri and like takealot, but competion is good, less competion in this type of market is bad!

  • Greg Mahlknecht

    > less competion in this type of market is bad

    This isn’t strictly true in this case – a retail company has to reach a certain size to get the scales of economy on logistics and buying power that a company like Massmart or Pick n Pay enjoys. Clearly neither Takealot or Kalahari are in that league yet. They’re big fish in a little pond, but little fish in the larger retail pond.

    Their buying power will DEFINATELY increase from their new size.

    The decreased competition MIGHT decrease service levels

    On balance, the pros outweight the cons right now. The ecommerce sector is so small in ZA, it’s faaaar to early to worry about monopolies. Massmart could make a play tomorrow and blow takeahari out the water.

    Neither loot nor raru are in the same league as takealot/Kalahari – loot’s a little wonky now and then and feels unfinished, and raru never seems to have anything in stock – I get the feeling they’re small and whenever you order something they send someone off to pick it up from the supplier – which adds an extra day or 2 to the shipping time.

  • Loman

    You make a valid point. I did not think of it like that.
    I do hope it works out all for the best.

    We’ll know soon enough.

  • CTN

    loot is more expensive on most items

  • Loman

    Well shockingly, we must have been looking at different products.

    Thus far many items that I have looked at was cheaper at loot, sometimes by as much as R40 on a R120 item.

    I bought a A3 laminator for R400 cheaper at loot.

    But I suppose there are things that is more expensive at loot. But that is why we should never stop shopping around.

    I bought some books of Raymond e Feist recently.
    When comparing them all:
    Kalahari is by far the most expensive at R176
    Then Raru at R163
    Then Takealot at R141
    but the winner is loot.co.za at R129

    So I guess it all depends on the item.

  • francretief

    I find the Takealot search algorithm very frustrating. If you enter more than one term, you should only see items that contain both terms. However, Takealot displays all items that match any term. For example, I searched for ‘Asus O Play’ (the media server). I was presented with all Asus items and all stuff that contain the work ‘play’. I ended up buying it from Nivo.

  • $85382128


    ex CEO of “Kalahari” Gary Hadfield

  • CTN

    yeah. He has personally written me the most insulting and rude emails.