Emerging markets media giant Naspers is set to discontinue a number of African ecommerce platforms. In a brief statement on dealfish.co.ke, the company’s investment arm MIH said it would be closing down Kalahari Kenya and Nigeria.
According to the statement, the decision was made because “the performance of the service has been below expectation since launch and reaching profitability was not a reasonable near-term prospect”.
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MIH launched online retail services in Kenya and Nigeria under the Kalahari brand in October 2009 and January 2010, respectively.
In South Africa, Kalahari is the company’s flagship ecommerce site and like Amazon.com runs on the classic “e-tailer” model, selling books, DVDs and music.
The group says it will refocus its efforts on the like of Dealfish and Mocality, a site provides group buying deals and also claims to be Kenya’s largest business directory.
According to business magazine Ratio, a number of South African investors have battled to gain traction in markets elsewhere on the continent.
Naspers’ print arm Media 24 also failed to crack the Kenyan market and closed down in 2010. The operation had published a portfolio of lifestyle magazines including Adam, Twende, True Love and Drum.
This kind of failure might seems surprising given the high levels of mobile connectivity in Africa and a sophisticated mobile payments system in MPesa. It also has a thriving web culture and is renowned for being open to web ventures looking to enter the country.
Ratio reckons that the failure of Kalahari Kenya and other websites like it is down to the fact that “any e-tailer, especially in the classic Amazon products — books, videos, music — will face challenges in a limited reading culture, competition from international e-commerce sites (now even more accessible with pre-paid cards), a vast range of cheap pirated DVDs, and downloads of books, movies and music. In addition, local infrastructure constraints make deliveries costly”