Just seven months after being acquired by international hedge fund company Tiger Global Management, Cape Town-based e-retailer Take2 has changed its name to Takealot and is talking up a plan to generate R1bn in annual sales within five years.
CEO Kim Reid, who has acquired 15% of the company’s equity as part of the Tiger investment, says e-commerce in SA is likely to boom in the coming years as more and more South Africans get online for the first time.
Originally formed in 2002, Take2 decided to rebrand as Takealot because it had not registered the Take2 trademark and was unable to buy the mark from the company that had registered it. Also, the dot-com domain for Takealot was available.
Reid, a former CEO at MWeb and former senior executive at Naspers, says Takealot plans to broaden its product offering — for now it sells electronics, games, books and movies — and expand its logistics capability.
Takealot, whose main rival is Naspers-owned Kalahari.net, is acquiring a stake in a logistics company — it isn’t disclosing the name yet — and has opened a warehouse in Johannesburg to provide speedier service to its clients in the city that generates 55% of its sales.
It’s also about to launch its first above-the-line marketing campaign, with advertising on radio, television, cinema and online in the expectation it can boost its annual sales growth from its current 35% to between 60% and 80%.
In the past 12 months, Takealot generated sales of R75m from 400 000 item sales to 45 000 customers.
“The total retail market in SA is worth R561bn/year, and online shopping is just R2bn of that,” Reid says. “In the US, it’s 8% of retail sales, so we think there’s a lot of headroom for growth.”
Tiger Global Management, which has US$9,5bn under its control, invests in a number of Internet businesses in emerging markets, including China, Brazil, Russia, India and SA. Its other SA investments are online auction site Bidorbuy and Private Property Listings. Tiger was an early investor in LinkedIn, Facebook and Zynga. — Duncan McLeod, TechCentral
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