Takealot Eyeing Sale of Superbalist Amid Competitive Pressure from Chinese Retailers

South African e-commerce giant Takealot is considering the sale of its fashion subsidiary Superbalist due to intense market competition posed by Chinese low-cost apparel retailers such as Shein, Temu, and Wish. Industry insiders report that with the escalation of these competitive pressures, Takealot is actively seeking potential buyers for Superbalist.

Superbalist, which started as Citymob in 2010 and pivoted to fashion e-commerce in 2013, quickly rose to prominence in the South African market. This success drew the attention of Naspers-owned Takealot, which finalized Superbalist's acquisition in 2014. The transition came after Takealot's significant funding boost aimed at expanding its South African operations.

The integration of Superbalist into Takealot's portfolio was strategic, targeting the millennial demographic known for its influential purchasing power. Despite the positive trajectory and maintaining an independent brand identity spearheaded by co-founders Claude Hanan and Luke Jedeikin, Superbalist faced challenges post-Covid with growth failing to meet forecasts. This situation led to restructuring initiatives under a Section 189 process in an effort to realign the business within the current economic climate.

Recent years have seen the Chinese e-commerce brands Shein and Wish establish a robust presence in the South African market, with Temu, backed by PDD Holdings, joining the fray more recently. These platforms have been accused by local entities, including the National Clothing Retail Federation (NCRF), of exploiting tax and custom loopholes to offer products at significantly lower prices, posing threats to South African retail jobs and revenue.

The allegations of undercutting the market are countered by claims from these Chinese companies that they adhere to existing laws and taxation regulations, pointing out that the displayed prices on their South African stores are exclusive of taxes and import duties, which are assessed upon parcel arrival.

Despite Takealot's assurance of its ability to compete with leading e-commerce players such as the anticipated Amazon South African marketplace launch, there remains concern regarding the impact that Chinese retailers could have on Superbalist. As a result, the decision to potentially divest the fashion retailer appears to be an effort to refocus and strengthen Takealot's core competencies.

Although details regarding the sale are limited, the move to sell Superbalist is projected to attract both local and international interest. Notably, Takealot has remained tight-lipped in the face of the ongoing speculation, upholding their policy of not commenting on merger and acquisition gossip. The future of Superbalist is thus at a critical juncture as the e-commerce landscape continues to evolve with shifting consumer trends and competitive market dynamics.