Takealot sells Supabalist amid fierce competition in South Africa’s fast fashion market

South Africa’s e-commerce space is changing, and Takealot has made a pivotal move by selling its fashion-focused platform, Superbalist, to a consortium of local investors led by Blank Canvas Capital.

While the exact terms of the sale have not been publicly disclosed, the decision reflects deeper challenges that Superbalist has faced in recent years.

Originally launched as Citymob in 2010, Superbalist pivoted to fashion e-commerce in 2013 and quickly became South Africa’s largest online fashion retailer.

Naspers-owned Takealot then acquired the platform in 2014 after a $100 million cash injection from Naspers, aiming to capture the millennial market. However, the exit of the platform’s original founders in 2019 marked the beginning of significant internal shifts​.

Despite its early success, Superbalist struggled to compete with international giant Amazon and fast fashion Chinese companies like Shein, Temu, and Wish, all of which gained traction by offering cheaper products and faster shipping, posing a significant threat to Takealot​.

These global competitors took advantage of a tax loophole that allowed them to pay 20% duty, far below the standard 45% plus VAT levied on local retailers. This gave them a major price advantage over Superbalist and other South African businesses. Although the South African Revenue Service (SARS) eventually began closing the loophole, Superbalist had already lost significant ground​.

Following a disappointing post-COVID recovery, Superbalist embarked on a Section 189 restructuring process in 2023. The company’s growth didn’t meet expectations, and even with 7% growth in 2023, it continued to drag down Takealot’s overall performance, contributing to the group’s $14 million (R252 million) trading loss for the fiscal year ending in 2024.

In contrast, Takealot.com and Mr D Food have been strong performers. Takealot.com experienced a 13% increase in gross merchandise value (GMV), and Mr D reported its first profit of $3 million (R56 million). In November 2023 alone, Takealot.com saw 17.5 million global visitors, 90% of whom were from South Africa​.

Takealot’s decision to offload Superbalist is part of a broader strategy to focus on these more profitable ventures, especially as the South African e-commerce market becomes more competitive.

Despite the sale, Superbalist will continue to rely on Takealot for warehousing and logistics services through a multi-year agreement, ensuring no disruption to customers during the transition.

Ultimately, this move allows Takealot to streamline its operations and focus on its more profitable ventures like Takealot.com and Mr D Food, while navigating the increasing competition from global retailers, like Amazon, and the evolving e-commerce space in South Africa.