If recent moves are anything to go by, Naspers is ready to compete with the best on the global stage.
Bob van Dijk is making his boldest move yet by betting on global start-ups such as LetGo and Twiggle in an apparent effort to compete against established giants including Amazon, Craiglist and eBay on their home turf. By Gugu Lourie
Van Dijk is also aggressively expanding Naspers’ internet TV services ShowMax across the African continent to defend its market against Netflix and other local players such as iROKOtv.
The Dutch-born CEO of Naspers has the financial muscle to do so.
Flush with cash, Naspers, which has assets that range from e-commerce to pay-TV and print media, disclosed in 2015 that it had $2 billion (R30 billion) offshore set aside for acquisitions.
Van Dijk, the former vice-president and general manager of eBay Germany and Europe Emerging Markets, is banking on Naspers priority to give customers what they want.
He is targeting investments opportunities in classifieds, e-tail and online payments, which are transforming ecommerce and the mobile space.
In the company’s latest annual report Van Dijk tells investors: “We are playing to win and are investing in proven business models that can become strong cash generators if executed well”.
The secret is out: Naspers is a powerhouse on prowl.
As part of its growth strategy, last week Naspers signaled its greater ambition to be a true global player.
It announced that it has opened an office in Silicon Valley in San Francisco, aimed at tapping US technology companies for strong global growth.
It also disclosed the investment of $15 million into US-based EdTech firm Brainly through Naspers Ventures.
Naspers’s $100 million investment into US-based LetGo, which is being merged with Wallapop, was the company’s first substantial attempt to break into the US market.
In April, the South African firm also poured $12.5 million into Israel-based digital commerce search engine Twiggle to challenge Amazon in digital commerce search. It also backed Indian online travel venture Ibibo through a $250 million investment.
The growth through acquisitions and investments into strategic internet platform is to ensure that Naspers improve and diversify its revenue generation away from one big source, Tencent’s contribution. This will help Naspers deal with the market perception that it’s a one trick pony relying on Tencent.
The opening of the office in San Francisco is to accelerate this move. This could also be a move to ensure that there is no single company that can manage to ogle Naspers with an intention to buy them.
That said, is Naspers story slowly mimicking the erstwhile behemoth SABMiller that is being gobbled up by the Belgian brewer Anheuser-Busch Inbev in a roughly $108 billion deal.
SABMiller went on a shopping spree, making it the second biggest global brewer until it attracted an aggressive suitor in AB Inbev.
Time will tell, if Naspers is following on the footsteps of SABMiller.
Naspers also runs a successfully low-cost digital pay-TV, GOtv, and profitable pay-TV operator DStv in the rest of the African continent. It continues to invest immensely into both platforms to grow and defend its market share.
Furthermore, mobile is transforming emerging markets faster in mature markets.
The R877 billion South African firm, that began 100 years ago, is becoming a largely mobile services company in its markets of Africa & Middle East, Asia, Europe, India South East Asia, Russia and Latin America.
In August 2015, Naspers launched its internet TV services ShowMax as a competitor to Netflix, the world’s biggest internet streaming services.
As part of its move to grow and defend its African territory, Naspers announced last week that it has launched ShowMax in 36 countries across sub-Saharan Africa.
This move is aimed at competing aggressively with Netflix on the African continent.
Furthermore, Naspers is aiming to take a leading position in online classifieds and already operates in more than 40 countries.
In January 2015, Naspers entered into agreements with Schibsted, Telenor and Singapore Press Holdings to establish joint classifieds business activities in Brazil, Indonesia, Bangladesh and Thailand. The group also acquired Schibsted’s Philippine classifieds business.
Still these businesses need to deliver profits in order for the company to further diversify its revenues.
As a successful African story is Naspers flirting risking its image by setting up an office in the US – an up to now forbidding market for South African firms.
It is said that reputation, takes years or decades to make, but it can all be lost in an instant.
While Naspers is on a growth trajectory, it is unlikely anything will easily tarnish its image.
But the jury is still out on whether the acquisitions and investments into start-ups are starting to diversify Naspers revenue streams.
The market will get a first glimpse on this next month when the company publishes its annual financial statements.
