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UNIVERSITY EXAMINATIONS
FI CONCESSION 2024
MNG4801
STRATEGIC MANAGEMENT
70 Marks
Duration: 4 Hours
EXAMINERS:
FIRST: DR NADINE DE METZ (UNISA)
SECOND: MS LEBOGANG MAMETJA (UNISA)
THIRD: MS LEBONE NKHUMELENI (UP)
This paper consists of 9 pages.
Instructions:
The examination instructions are provided on pages 2-3 of this examination question
paper. The case study begins on page 4.
UNIVERSITY EXAMINATIONS UNIVERSITEITSEKSAMENS
MNG4801 FI CONCESSION 2024
Strategic Management
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EXAMINATION CASE STUDY
E-COMMERCE IN SOUTH AFRICA: THE TAKEALOT STORY
With the temporary closure of physical stores due to lockdown restrictions brought about by
the COVID-19 pandemic, there was never a more perfect time to shop online. While
prepandemic online sales accounted for only 8% of the total card payments in the South
African retail market, this number jumped to 14% at the end of 2021 (BusinessTech, 2022).
FNB Merchant Services CEO, Thokozani Dlamini commented that “e-commerce has
already exceeded our conservative estimates initially published at the peak of the pandemic,
and it’s clearly here to stay” (BusinessTech, 2022). He further estimated that South Africa’s
ecommerce market would reach highs of more than R400 billion by 2025 on more than 1
billion transactions per year (BusinessTech, 2022).
Takealot enters the e-commerce market
The pandemic catapulted e-commerce in South Africa, and Takealot became one of the
biggest takers. In the first year of the pandemic, Takealot is reported to have benefited from
the shift to online by growing revenues by 36% (BusinessTech, 2021). Takealot is a local e-
commerce website that was launched in 2011 after the acquisition of the e-commerce
business called “Take2”, by a US-based investment firm, Tiger Global Management and Kim
Reid (Takealot, n.d.). Although the website has historically performed well, in the 6 months
between March and September 2020, the company’s revenue rose by 41% to over
R4 billion (Browdie, 2021).
At its inception, Takealot’s vision was “To be the largest, simplest, most customer-centric
online shopping destination in Africa.” The vision has been realised through opening and
expanding warehouses in Johannesburg, Durban and Cape Town as well as expanding its
department offerings across Electronics, Lifestyle, Media, Gaming and Fashion (Takealot,
n.d.). Takealot’s values can be summarised in 9 phrases: Diversify: striving for a diverse,
inclusive, and safe environment for all people. Smart: dedicated, result-orientated team
playing. Simplify: making it easier for customers. Do it, if you see a problem, find a solution.
Individualise: forget averages, it’s all about the individual. Fun: love what you’re doing.
Direct: Forthright but respectful. Wise: Spend wisely. Fast: Quick decisions, decisive
implementation. (Takealot, n.d.).
E-commerce has had a slow progression in South Africa, largely because of South African’s
love of malls and shopping centres. However, the national lockdown ignited a new love for
the convenience of online shopping among South Africans. “We saw between 50% and 70%
growth in e-commerce in South Africa”, says Arthur Goldstruck, the managing director of
World Wide Worx, a Johannesburg-based technology market research organisation.
Takealot accounts for possibly half of South Africa’s e-commerce sales and has been
described as the Amazon of South Africa (Browdie, 2021). Takealot can attribute some of
its success to its thriving human resources of over 6 000 employees and over 13 000 drivers
working for the company. Naspers reported: “Takealot.com, our leading e-commerce
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platform, successfully navigated the challenges of global supply chain constrains across
multiple categories, especially consumer electronics” (Vermeulen, 2022).
Takealot’s expansion throughout the years
In 2013, Takealot expanded the business by purchasing a 60% stake of Mr Delivery, a
delivery and logistics company, which was later renamed as “Mr D”. With Takealot on board
with Mr D, the food delivery business was able to scale up on technology services and
systems that would take the business to a whole new level. After selling 60% of its stake to
Takealot, Mr D has also been able to transition from purely offering food delivery services
towards becoming an all-rounded business-to-consumer (B2C) distribution business, that
focuses on last mile deliveries to the consumer market (BusinessTech, 2013). This purchase
also allowed Takealot to gain ownership of Mr D’s logistics network through the
Takealot Delivery Team (formally known as Mr D Courier) as well as gain control of the
appbased food delivery service through the Mr D division (formally Mr D food) (Takealot,
n.d).
Former CEO and founder of Takealot, Kim Reid expressed joy in purchasing a large stake
in Mr D by stating: “We are very happy with the level of service provided to us by Mr D over
the course of the last year, so happy in fact that we have decided to invest further and
secure a meaningful stake in the business” (Bizcommunity, 2013). After buying a big piece
of the Mr D pie, Takealot successfully purchased Superbalist.com, a fashion website. In
2021, the Naspers group acquired a 100% stake in Takealot for almost R830 million and
subsequently gained total control of the Takealot group (BusinessTech, 2022). This was
followed by the announcement that Kalahari.com, which was owned by Naspers, would be
combining businesses with Takealot.com with the aim of building a premium online shopping
site to cater for the African market. After a successful merger, all Kalahari customer accounts
were transferred to Takealot.com (Takealot, n.d.).
