Takealot wants to sell Superbalist

Takealot is looking to sell its fashion retailer Superbalist because of concerns about increased competition from Chinese apparel shops Shein and Temu.

Daily Investor has learned from well-placed industry sources that Takealot is investigating the sale of Superbalist.

Details around the planned sale remain sketchy, and Takealot did not comment on questions about the planned sale.

However, it is understood that Takealot’s management is concerned about the threat from low-cost Chinese retailers like Shein, Temu, and Wish.

Shein and Wish have a strong presence in South Africa’s eCommerce market, and Temu recently joined their ranks with a successful local launch.

Temu is owned by and operated by PDD Holdings, which also owns Pinduoduo, a popular online commerce platform in China.

Temu is using its popular coupon discount and free shipping services, which are familiar to users in other regions, in South Africa.

Numerous accusations have been made that Shein and Temu exploit tax and customs loopholes to import their products cheaply into South Africa.

The National Clothing Retail Federation (NCRF) had flagged these issues with the South African Revenue Service (SARS).

NCRF executive director Michael Lawrence said Shein and Temu undercut local retailers, putting thousands of local jobs on the line and limiting revenue collection.

Temu dismissed the allegations, saying it is committed to complying with local laws and regulations in the markets where it operates.

It explained that the prices it displays in its South African shop do not include import duties and taxes. Local authorities impose applicable taxes when parcels arrive.

Superbalist for sale

Superbalist, initially known as Citymob, was founded in November 2010 by three local entrepreneurs – Luke Jedeikin, Claude Hanan, and Daniel Solomon.

Citymob quickly became a favourite among online shoppers thanks to its exclusive experiences, premium products, and hand-selected styles.

In 2013, Citymob pivoted the business to fashion eCommerce as Superbalist, which became South Africa’s largest online fashion retailer.

Naspers-owned Takealot acquired Superbalist in August 2014 after it received a US$100 million cash injection to expand its South African operations.

At the time, former Takealot CEO Kim Reid said he was excited about the acquisition because the millennial generation is deemed the most powerful and relevant market.

Superbalist continued to operate as an independent brand under its existing management team, led by Hanan and Jedeikin.

However, the founders left Superbalist in December 2019 and joined The Foschini Group (TFG) two years later to help the company realise its eCommerce ambitions.

Last year, Superbalist embarked on a Section 189 process that will lead to the restructuring of its business.

It explained that growth post-Covid has not reached the levels that had been forecast.

“As such, we need to reevaluate our structures to ensure that the business operates effectively in this current economic environment,” it said.

Takealot is now looking for a buyer for Superbalist. Industry experts said they will likely look at local and international buyers.

It is understood that Takealot is confident it can compete against Amazon, which is set to launch a South African marketplace this year.

However, it is concerned that low-cost Chinese retailers like Shein, Temu, and Wish may negatively affect Superbalist’s operations.

Experts said it made sense for Takealot to try to offload Superbalist and focus on Takealot with Amazon’s launch looming.

Daily Investor asked Takealot for comment regarding the planned Superbalist sale, but the company preferred not to comment.

“In keeping with our group policy, we do not comment on any speculation surrounding mergers and acquisitions,” Takealot said.

This article was first published by Daily Investor and is reproduced with permission.