Takealot Sells South Africa’s Top Online Fashion Retailer Superbalist

Takealot, Naspers’ e-commerce giant in South Africa, has sold its online fashion retailer Superbalist to a consortium of South African retail and private equity investors led by Blank Canvas Capital.

The sale marks an exit from fashion for the retail giant as it focuses on its core operations—Takealot.com, its e-commerce platform, and Mr D, its popular food delivery service.

Reports first surfaced in March that Takealot was considering offloading Superbalist in response to mounting competitive pressures in the South African e-commerce landscape.

The entry of global players like Amazon and the aggressive expansion of low-cost Chinese retailers such as Shein, Wish, and newcomer Temu have significantly crowded the market posing a more immediate threat to its business model.

These budget-friendly competitors have not only intensified the competition but have also exploited tax loopholes to import clothing at reduced duties, undercutting local retailers like Superbalist.

Takealot confirmed the sale on Monday, stating that this strategic move will allow the company to concentrate on expanding its main businesses. “We extend our best wishes to the Superbalist team as they embark on this new chapter in their journey,” the company said while reassuring customers that Superbalist’s services “will continue without interruption during the transition.”

To ensure a smooth handover, Takealot says it will maintain its support through a multi-year service agreement, providing warehousing and logistics services to Superbalist.

The decision to sell Superbalist also comes against the backdrop of financial challenges driven by the highly competitive landscape.

Despite a booming online retail market in South Africa, which reached a turnover of ZAR 71 B (USD 3.97 B) in 2023, Takealot has struggled with losses. The online retailer had reported a trading loss of ZAR 252 M (USD 14 M) for the fiscal year ending on March 31, 2024, primarily driven by Superbalist.

While Takealot.com and Mr D reported profits, Superbalist’s performance has lagged, failing to meet post-COVID growth expectations.

Superbalist’s journey began in 2010 as Citymob, a platform that quickly gained popularity for its exclusive offerings and curated products. In 2013, it pivoted to focus on fashion e-commerce, rebranding as Superbalist and eventually becoming South Africa’s largest online fashion retailer. Takealot acquired Superbalist in 2014 as part of a ZAR 1.8 B (USD 100 M) investment from Naspers, aiming to capture the millennial market, which was considered the most powerful demographic in online retail.

However, the South African retail landscape has evolved, and Superbalist has faced significant challenges in adapting to the changing environment. Last year, the company underwent a Section-189 process to restructure its operations, aiming to better align with the current economic conditions. Recent developments underscore the ineffectiveness of this strategy.

For Superbalist, the acquisition by Blank Canvas Capital and its partners offers a chance for renewed focus and growth. With fresh backing, the retailer could be better positioned to navigate the challenges of an increasingly competitive e-commerce landscape in South Africa. Meanwhile, Takealot’s decision to concentrate on its core businesses reflects a strategic pivot, as it prepares to face the evolving dynamics of the market.

Superbalist’s journey under new ownership will be one to watch as it seeks to carve out its place in South Africa’s rapidly changing e-commerce market.