(Takealot)
- Takealot CEO and creator Kim Reid is "stepping back", the e-commerce behemoth announced on Friday.
- He will become chairperson of the 2,500-employee group that also includes Mr D and Superbalist, and it is looking for a new CEO.
- Here's how Reid built Takealot, with mega-injections of capital and by buying customers from rivals, creating SA's biggest online retailer.
- For more stories go to www.BusinessInsider.co.za.
Online retailer Takealot is looking for a new group CEO, it announced on Friday.
Current CEO Kim Reid will soon become its chairperson, Takealot said in a statement, "stepping back from day-to-day operations to focus on initiatives that will deliver future value for the group".
Takealot is, by a significant margin, the biggest e-commerce operator in South Africa. It employs more than 2,500 across three major brands (the group includes fashion retailer Superbalist and the Mr D food-delivery service), and its parent company Naspers believes it is strong enough to stop Amazon successfully entering the SA market.
That is a position Reid, an accountant who believes success in e-commerce is all about capital, engineered over the course of a decade, securing mega-injections of cash from large corporates, and buying out the competition.
Here is how outgoing CEO Kim Reid created Takealot.
Reid came to e-commerce by way of accounting, and music
Kim Reid is a chartered accountant who worked at the Gary Player Group and Barlows, and was a financial director for Sony Music before he joined Multichoice – then owned by current Takealot parent Naspers – as CFO in 2000.
He joined consumer internet service provider (ISP) M-Web in 2003, with a promise to increase its focus on business clients. After a few years there he moved to the higher level of MIH Africa, the Naspers division with overall responsibility for some of its online businesses – including e-tailer Kalahari.net.
Takealot officially launched in 2011, but its roots go back further than that
E-commerce website Take2 was launched in 2002. In 2010 it was acquired by giant US investment firm Tiger Global Management – with a 15% stake for its new head, Kim Reid, reinvented as an entrepreneur.
Seven months later, things were moving fast. Take2 changed its name to Takealot, launched its first advertising campaign, and disclosed it was acquiring a logistics company, with the undisclosed but presumably large cash injection from its new owners.
A surge in growth left the company with just one deep-pocket rival: Naspers' long-established, if loss-making, Kalahari.net.
A food company that would turn 29 this year became Takealot's delivery backbone
The food service which has been called Mr D for many years, but still often fondly referred to as Mr Delivery, traces its roots back to 1992, a full decade before Takealot's progenitor site was launched.
In 2011, Takealot bought a large minority stake in the delivery company, with an eye on same-day deliveries. In early 2013, Takealot took control, just as Mr D was expanding into logistics more broadly, a course presumed to have been charted by Reid.
Takealot split the food-delivery company into two, eventually re-launching Mr D Food as an entirely app-focussed business, while turning what it would call Mr D Courier into a high-tech delivery operation geared for e-commerce speed and complexity.
From no acquisition plans, to buying its biggest rival – in months...
In May 2014, news broke that Takealot had secured $100 million from is owner, Tiger Global, an injection considered huge even in American terms.
But Takealot would continue to focus on organic growth, and had "no acquisition plans", Reid said.
If that was true at the time, it wasn't for long.
In October 2014, Takealot and Kalahari announced a "merger", on the basis that they needed scale to compete with both traditional retailers in South African and global e-commerce behemoths such as Amazon.com.
"The businesses will continue to trade separately and service their customers as usual through the festive season," read an official announcement.
By May 2015, Kalahari.net was gone, after 17 years in business. Later, after Kalahari's staff had been let go, Reid said the deal had been about customer acquisition.
"[T]he stronger business survived," he said in an interview in 2017.
... while working on another deal in the background
While setting up the Kalahari deal, Reid was also talking to another competitor.
Fashion website Suberbalist had been shopping for investors for some time, both locally and abroad, with no success. In early 2014 – before the Tiger Global investment – the site's management met with Reid. By August, a deal had been reached.
Unlike Kalahari, the Superbalist brand still exists, as a Takealot subsidiary.
Enter Naspers, with a lot more money
The Kalahari merger, later filings showed, gave Naspers a 46.5% stake in Takealot in what it accounted for as a R1.2 billion deal, with a "deemed disposal gain" of R154 million.
In 2017, following the path of Tiger Global before it, Naspers made a single huge investment into Takealot, R960 million worth – which put it in control, with 53.5% of shares under its control.
Later that year, Naspers bought out Tiger Global, leaving only a small number of shares in the hands of management.
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