Naspers prepares for Amazon fight on home soil 

Naspers, the South African tech giant that began life as an Afrikaans media house, has a huge consumer footprint, even if many of the people who use its services may not know it by name.

Now a global behemoth, it has an important role in developing the tech ecosystem in South Africa and across the continent. It operates out of its historical base of South Africa, where it is the largest firm on the Johannesburg Stock Exchange, and the Netherlands, where it is a majority shareholder in Prosus, the tech investment company that was listed in 2019. Its operational footprint extends across diverse markets, including Europe, India, and Brazil, serving a vast user base that surpasses two billion customers.

For a company set up in 1915, its reinvention to become a major player in a sector that favours younger firms is quite remarkable. Phuthi Mahanyele-Dabengwa has run the South African arm of the company since 2019, where the Naspers group runs popular consumer brands such as Mr D Food, Takealot, Superbalist, AutoTrader, Property24, PayU and Media24, a print and digital media company.

One of these ventures, Takealot, is Naspers’ ambitious attempt to pull the rug from under the feet of global e-commerce and logistics giant, Amazon, which is finally entering the market. Currently Takealot, along with other players such as Makro (southern Africa), Jumia, Jiji and Konga (east and west Africa) are the big players in an e-commerce market that Mahanyele-Dabengwa believes is set to grow to $72bn by 2025, buoyed by a youthful, tech-savvy population and a rising middle class.

But with a market cap of $1.61 trillion, Amazon is a fearsome rival to take on, even when local players like Takealot can claim a better understanding of Africa’s famously unconventional markets.

“I think the first issue for me is that I think it’s important that we support locally developed businesses in Africa,” says Mahanyele-Dabengwa.

Takealot has about 1,000 small and medium sized enterprises on its platforms. Many have managed to scale up their businesses. For some, this has enabled them to open up physical spaces, employing more people and serving even more.

“To protect the employment of these people, it’s important that we protect our businesses on the African continent. And that’s not to say that we are against foreign organisations coming into the continent. Yes, they should also come onto the continent but it’s also important that we ensure that we are truly providing the protection and support for our local businesses so that we can become significant players,” Mahanyele-Dabengwa says.

Mahanyele-Dabengwa’s contention, however, is that African companies must be able to compete and thrive in the face of such a potent entrant.

“What will happen with an entity such as Amazon is that they’ll come into South Africa and they’ll scale beyond and they’ll be all over the African continent. How unfortunate that it’s not an African company that is able to be all over the continent and provide the services and goods,” she says.

Naspers’ global reach

Naspers, however, is hardly a minnow.

It has a multicountry footprint and is present in markets as far flung as China, India and Brazil. Its remarkable modern growth, and that of Prosus, was based on its transformative investment in Chinese tech giant Tencent. Naspers’ international reach helps it develop capabilities that it can apply in other markets, including Africa, Mahanyele-Dabengwa says.

“Mr. Delivery, for example, has access to the businesses that we run, for instance, in India. So Mr. D can see what they do and improve based on what Swiggy [31% owned by Prosus] is also doing,” she explains. “We are continuously looking at different ways of improving the different businesses but unfortunately, there are certain barriers. And a lot of those barriers come down to the infrastructure as a start,” she adds.

Apart from infrastructure, the cost of access can also place African consumers in a slightly different position from customers in other markets.

“Fortunately, mobile phone penetration in sub-Saharan Africa is significant. But we still need to have more access to the internet, cheaper access and more people using software programs to be able to provide services or get access to services and goods.”

Put plainly, more people online, able to buy phones and data, will mean more people able to access the services that Naspers ventures are making available to African consumers, enabling them to find information, accommodation, employment and food at the push of a button or two.

These services will become even more intuitive and useful to customers in Africa and other markets as Naspers ramps up deployment of artificial intelligence.

“We have had an AI team in Amsterdam for quite a number of years and they’re doing a lot of work, looking at various products that they can produce for the support of our businesses, be it our delivery business in Brazil, India, or South Africa and making sure that our businesses are as efficient as possible on the back of AI.”

“We’ve actually just made a significant investment in an AI business just this week. So we are focused on what is happening in places like San Francisco, where we actually have our ventures team – the team that made the investment. So AI is a big area of focus, attention and investment for us.” Another constraint Mahanyele-Dabengwa has identified is the dearth of digital skills on the continent, particularly in the field of AI.

“We need more African developers in the AI industry. Globally, [the world has] approximately 24 million developers, but the African continent has around 716,000 of those. Of that 716,000, South Africa has 17%.” The firm launched Naspers Labs two years ago, a training programme that has provided over 1,500 young people with the skills they need to work in the digital ecosystem.

“I am very happy with the progress. Naspers Labs is key in terms of digital skilling, which is a key requirement if Africa is to be a part of the discussion of the digital world. We need to ensure that we stop being a net importer of digital skills, which is what we are now.”

‘Everyone requires digital skills now’

This is critical not only to the tech sector but the wider economy as digitalisation becomes more and more mainstream.

“Whether they are in medicine or mining, everyone requires digital skills now if they are to conduct business more efficiently. So the one thing that we need to do is to ensure that we get as many young people to be digitally skilled” as possible, she says. The programme targets students coming out of both universities and high schools, training and reskilling where necessary and helping them to find jobs after.

It is an effort that Mahanyele-Dabengwa hopes can help bridge the skills gap between Africa and India, for example, enabling African youth to also turn out turn out innovations as useful as those of their colleagues in other continents. Sustainability is another area of focus for Naspers and it’s an area where Mahanyele-Dabengwa has been vocal recently.

“The reality is that the nature of our business lends itself to sustainability,” Mahanyele-Dabengwa says, explaining that its investment decisions and its own use of resources are today assessed through this prism.

That means tracking its own energy use, choosing electric vehicles where possible and cutting back on air travel which, perhaps, might be quite the challenge for a company with corporate arms in two continents and operations in at least four.

But that’s probably what it means to be a 108-year old company competing with modern tech giants – taking on impossible-sounding challenges.