AND then there was one. SA’s two biggest online e-commerce players, Kalahari.com and Takealot.com, have merged. This shows that the online market bears many similarities to the real world, not least of which is consolidation.
Kalahari is the e-commerce arm of Naspers. Takealot is part-owned by investment firm Tiger Global Management, which in May pumped $100-million (more than R1-billion) into it.
Takealot, once known as Take2, is run by Kim Reid, a highly regarded former Naspers senior executive who has bought other smaller e-commerce websites, including Superbalist.com.
"If you look at the size of the market right now, there is a R550-billion opportunity in which e-commerce is only just beginning to play a role," Reid said in May after the funding was announced. He said Takealot had been growing at 100% year on year.
In June, Takealot announced that technology entrepreneur Willem van Biljon had joined it as both chief technology officer and co-CEO with Reid. Van Biljon helped develop what is now Amazon’s EC2 cloud service and Nimbula software.
The new giant will be called Takealot and Reid will continue to lead it, with Naspers and Tiger owning about 41% each.
Online shopping hasn’t really taken off in SA as it has elsewhere in the world. The current leader is the US, where giants Amazon and eBay (and its PayPal division, which Elon Musk sold) have provided the first wave of e-commerce. But it is rapidly being eclipsed by China, especially by Alibaba, a hybrid clone of Amazon and eBay with its own PayPal-like service.
Online shopping hasn’t really taken off in SA as it has elsewhere in the world. The current leader is the US, where giants Amazon and eBay (and its PayPal division, which Elon Musk sold) have provided the first wave of e-commerce.
Alibaba listed in late September on the New York Stock Exchange, raising $25-billion, making it the biggest IPO in history. "Based on [its opening day] closing share price, the company had a market capitalisation of more than $230-billion — larger than fellow tech giants Facebook and Amazon [and eBay], and big US companies such as JPMorgan and Procter & Gamble," the Financial Times wrote.
"Had it listed on the Hong Kong exchange, as was once planned, 15-year-old Alibaba would have become the city’s third-largest company by market cap, behind only China Mobile and PetroChina."
Alibaba executive chairman Jack Ma has long been revered as an entrepreneurial pioneer in the mould of Amazon founder Jeff Bezos. He took the final step to becoming a global business leader with a seemingly off-hand, but very earnest comment, the sort you’d expect from Warren Buffett or the more arrogant Larry Ellison: "If you are poor by 35, you deserve it. You are poor because you have no ambition. Ambition is living a life of great ideals; a magnificent goal in life that must be realised."
But the oft-quoted Ma has been through a few boom and bust cycles of his own, waiting for Alibaba to become the behemoth it is today. It eventually beat out Yahoo as a search engine (and the US search giant reaped a substantial reward for its stake after the listing) and eBay as a commerce portal in the now all-important Chinese market.
"eBay may be a shark in the ocean, but I’m a crocodile in the Yangtze River. If we fight in the ocean, we lose, but if we fight in the river, we win," Ma once said, ultimately proving himself right.
"In carrying out e-commerce, the most important thing is to keep doing what you are doing right now with passion, to keep it up."
When Tiger announced its funding earlier this year, Reid — who took a 15% stake in Takealot for himself — said he planned to increase Takealot’s revenue to R1-billion within five years.
Now combined with Kalahari — arguably the better-known brand in SA, but perhaps not in Africa as a whole, where an African-based e-commerce operation would be expected to play a significant role — that seems more likely.
Kalahari and Takealot will be hoping that another of Ma’s memorable quotes comes true: "Today is cruel. Tomorrow is crueller. And the day after tomorrow is beautiful."