Takealot is exploring the possibility of selling its fashion retailer Superbalist due to mounting concerns over intensified competition from Chinese apparel giants Shein and Temu.
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Sources familiar with the matter revealed to Daily Investor that Takealot is actively considering the sale of Superbalist. However, specific details regarding the proposed sale remain scarce, and Takealot declined to provide any comments or clarifications regarding the matter.
Management at Takealot has expressed apprehension about the growing threat posed by budget-friendly Chinese retailers such as Shein, Temu, and Wish. These companies have established a strong presence in South Africa’s eCommerce landscape, with Temu recently entering the market following a successful local launch. Temu, operated by PDD Holdings, leverages popular coupon discounts and free shipping services, which are familiar to users in other regions, to gain traction in South Africa.
There have been numerous allegations against Shein and Temu for exploiting tax and customs loopholes to import products cheaply into South Africa. The National Clothing Retail Federation (NCRF) has raised concerns with the South African Revenue Service (SARS) about these practices, arguing that they undercut local retailers, jeopardize local jobs, and hamper revenue collection.
Temu has refuted these allegations, asserting its commitment to complying with local laws and regulations. The company clarified that prices displayed on its South African platform do not include import duties and taxes, which are imposed by local authorities upon parcel arrival.
Superbalist, formerly known as Citymob, was founded in November 2010 by Luke Jedeikin, Claude Hanan, and Daniel Solomon. Initially gaining popularity for its exclusive experiences and hand-selected styles, Citymob transitioned into fashion eCommerce as Superbalist in 2013, becoming South Africa’s largest online fashion retailer.
Naspers-owned Takealot acquired Superbalist in August 2014, following a US$100 million cash injection aimed at expanding its South African operations. Despite the acquisition, Superbalist operated independently under its existing management team until the departure of its founders in December 2019.
Amidst challenges in post-Covid growth, Superbalist initiated a restructuring process last year to reassess its business operations. With Takealot now seeking potential buyers for Superbalist, industry experts anticipate interest from both local and international investors.
While Takealot remains confident in its ability to compete against Amazon’s impending launch in South Africa, concerns persist regarding the impact of budget Chinese retailers on Superbalist’s performance. As a result, Takealot’s decision to divest Superbalist aligns with its strategic focus amidst evolving market dynamics.
