Takealot Group Case Study - How They Got To Be Successful

The objective of the Takealot Group was to be the largest most customer-centric online shopping destination in Africa. At present they have exceeded expectations as they are not only an online destination in Africa, but have become the largest retailer on the continent. Takealot is now available in South Africa, Namibia and Botswana. Now, while this tells of the current state of the Takealot Group, one may wonder where this mega online retailer began.

The idea for Takealot budded in October 2010 when previous MWEB CEO, Kim Reid, together with the help of a US-based investment firm (Tiger Global Management) bought an existing eCommerce business called Take2 and rebranded it as what we know today as Takealot. Takealot officially launched the following year (2011) in June. With a steady eCommerce growth in the South African market it is no surprise that Tiger Global Management invested an additional $100 million in 2014. In addition to this, the Takealot Group purchased a multi-restaurant delivery service formerly known as Mr. Delivery in 2014. Prior to being bought by the Takealot Group, Mr. Delivery had been founded in 1992 in Cape Town.

Just as Take2 was renamed Takealot, Mr. Delivery faced a similar rebranding and it came to be known as Mr. D Food. Their app launched two years after its acquisition in 2016. This not only increased the food delivery service’s reach, which grew to over a million customers in over 2 500 areas, but it also created a neutral space where restaurateurs and food franchisors could advertise what foods they have, which gave these businesses greater exposure to a wider audience. Currently Mr. D Food app has over 8 000 restaurants to choose from. Moreover, with the freedom to sign up as a freelance driver who works flexible hours, the app gives people the opportunity to make extra income. Mr. D Food app boasts a total of over 4 500 drivers.

In August 2014 the Takealot Group made waves by acquiring Superbalist for $100 million, but unlike Take2 and Mr. Delivery, Superbalist retained its name. Prior to the Takealot take over, Superbalist had been a company called Citymob that later rebranded in 2013 as Superbalist to sell international fashion brands such as Diesel and G-star RAW. Kim Reid saw this as an opportunity to appeal to the millennial generation, as Superbalist had been run by millennials for millennials. Superbalist created a bridge to reach a greater audience. In the same year, the Takealot Group launched a marketplace and gave small and medium-sized enterprises (SMEs) an opportunity to grow their businesses by selling their products on Takealot. 2014 proved to be a pivotal year for the Takealot Group as the addition of Superbalist and Mr.D Food are partly responsible for Takealot Group’s success.

In 2015 Takealot merged with Naspers-owned Kalahari.com, giving Naspers a 46% stake in The Takealot Group. Kalahari’s 17 year enterprise had been declining in comparison to Takelot’s growing customer base. When Kalahari’s website shut down their customers were redirected to Takealot. This grew the Takealot Group’s customer base even more. Fast-forward to 2018 and Naspers increases their investment in the Takealot Group to 96%. In the same year Superbalist merged with online fashion retailer, Spree. Adding Spree to Superbalist brought an increased fashion range to choose from, along with Spree’s customer base. In 2019 Takealot Group launched the Pickup points nationwide, which gave customers the convenience of choosing when they are able to take their orders.

Jumping ahead to 2022, the Takealot Group partnered with Pick ‘n Pay to deliver groceries to people. This not only highlights Takealot Group’s commitment to be a forward-thinking business, but it also shows the Takealot Group to be a company that bridges gaps that exist between businesses and consumers.

Takealot Group has navigated its fair share of challenges. While 2020 proved to be a strong year for the company, driven by the surge in e-commerce during the COVID-19 pandemic, it also intensified competition. The rise in online shopping attracted both local and international players like Shein and Amazon, forcing Takealot to refine its strategies to maintain its market dominance. Post-Covid, Takealot did not reach its projected growth which was expected to reach its peak in 2021, but things took a turn for the worse and as a result, Superbalist had to begin a retrenchment process in order to cut costs. They reported a loss of R407 million ($22 million) in 2023, a rise from the R129 million ($7 million) loss in 2022. The Takealot Group also struggled with delivering to townships due to the high incidence of cargo theft. To counter these challenges, they began to use personal shoppers, advanced logistics and worked with community members to fight crime.

What Makes The Takealot Group So Successful?

While many factors are involved in making a business as big as The Takealot Group successful, these are some qualities that make it the success story it is today:

• Wide selection of products: by offering something for everyone, they’re able to attract and cater to a broad audience.

  
  

• Value-based pricing: by regularly offering discounts and deals, they attract customers, growing their customer base.

  
  

• Dependable delivery system: considering the challenges they faced with delivering to townships, they did not abandon them, but found ways to bring more delivery options that are fast and efficient.

  
  

• Multi-payment options: by offering a range of payment options they accommodate diverse customer preferences.

  
  

• Customer-centric approach: prioritising customers makes them feel valued and understood, showing Takealot’s commitment to customer-centricity.

  
  

A look at Takealot's success leads me to conclude that business is a fusion of patience, research, good investments and a clear goal of what you want the focus of your business to be, among other things. Although Takealot's product offerings seem unrelated, the company maintains a cohesive presence by using distinguishable apps and websites for each category, demonstrating its organisational expertise.

The Takealot Group began by purchasing one company and its continued success is owed to the fact that it continued to buy existing companies and rebranding them to fit what they do. The Takealot Group continues to thrive on striking a balance between businesses and consumers. The expectation is that it will continue to grow by establishing more relationships with other businesses and creating convenience for their customers.