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Sources: Naspers is shutting down major ecommerce sites from MIH SA [updates]

Style 36

Emerging markets media and internet giant Naspers looks set to shut down a number of ecommerce sites run by its online investment arm MIH. At least three of the sites affected are part of the company’s African Internet Accelerator (AIA) programme.

Ventureburn sources say that the collapse of the sites will come with job losses and a major restructuring. According to a well placed source, a number of the South African ecommerce investments made by MIH in the last few years will be dissolved, with some parts being absorbed into larger Naspers players such as Kalahari.

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Update: A Ventureburn source from within the group, who asked to remain anonymous, confirmed the shutdown saying that MIH had shifted its strategy, calling it a “sad day for ecommerce”.

Another source, however, said that the senior Naspers executives they were in contact with were surprised at talk of a shutdown, with one maintaining that most of the sites are on target and will be back up soon.

The notice on the 5Rooms site, which specialises in high-end furniture, included two major spelling clangers: “We will be up anr [sic.] running soon!!” and “… we applogize [sic.] for the inconvenience…”. This suggests that the “maintenance” notices were put up in somewhat of a rush.

Late yesterday, a number of the sites in the portfolio went down “for maintenance”. The other sites affected, include online fashion outlet Style 36, digital camera store SAcamera and baby product outfit Kinderelo.

Johann van Tonder, a former senior executive at Naspers, commented on the link between the two on Facebook:

Update: As of Friday night, the sites were back up and operational.

The AIA sites had, for the most part, either run independently or come out of incubators before joining the accelerator (5Rooms started out in the Rocket Internet stable for instance).

AIA was founded in mid 2013 with a majority investment from MIH. The accelerator is headed up by Emilian Popa, a web entrepreneur whose previous experience includes time spent at Rocket Internet, as well as South African online clothing outlet Zando and Nigerian ecommerce site Jumia (both of which started out under the German-based startup clone factory).

SAcamera is perhaps the most notable of the affected sites, given that when MIH snapped it up in 2012 it was stated that it operated from within the Kalahari fold.

MIH’s global reach has seen it make investments in internet properties across the world, with the biggest focus being on emerging market countries such as Brazil, Russia, China and India. Two of those investements — in China’s Tencent and Russia’s — now account for the majority of the company’s revenue.

If MIH is shutting down AIA, it could be a suggestion that the emerging ecommerce space in South Africa isn’t working out as well for the company as it might have hoped.

Naspers, particularly its boss Koos Bekker, is known for showing low tolerance for under-performing divisions and wielding the axe to shut them down quickly.

Ventureburn has reached out to Naspers for comment and will update the story accordingly. We have also repeatedly tried to contact AIA’s offices for comment, but each phone call has been met with an engaged tone. All the ecommerce sites affected remain within Naspers’ officially listed structure at present:

Update: Naspers Investor Relations officer Meloy Horn confirmed to Ventureburn that the group is restructuring its ecommerce business to focus on Kalahari.

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