Takealot Vouchers (Begging) Thread

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alqassam

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You forgot about the other type of customer, the one who only buys when it's below cost. Takealot has gathered too many of those with their and Kalahari's voucher war. It's better to have 1 once off customer than any of those. I don't know what you mean by net price. I like Loot more because they are well priced and have a lot of delivery flexibility. Takealot is still not using postal delivery claiming it's because of last year's strike.

But if they take that loss out of the marketing budget then is it a loss. Instead of spending R1m on advertising they spend it on voucher and when a voucher is used its recovered from the marketing budget.
 

MagicDude4Eva

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But if they take that loss out of the marketing budget then is it a loss. Instead of spending R1m on advertising they spend it on voucher and when a voucher is used its recovered from the marketing budget.

Not really. Takealot and Kalahari use vouchers to push sales through and not to acquire new customers. The e-commerce customer base is pretty static with a predictable growth rate as internet becomes more accessible and people become comfortable with online ordering and payments. With any business you will initially pay an acquisition cost to sign up the customer and then need to create some stickiness to keep the base. Everyone thought that with the Takealot/Kalahari merger their customer base would be 1+1=2, but in fact it was more like a 1+1=1.2 as most Kalahari customers already shopped on Takealot and vice versa.

Vouchers result in instant cash burn and invite fraud as people will sign up multiple accounts and this results in over-inflated figures of a customer base. When a business subsidises shipping and then throws in a voucher, a product is not even sold at break-even, but mostly at loss (what you guys do not take into consideration is the OPEX burn when it comes to running the business with a few hundred staff, warehouses as well as millions spent every month on radio/SEM etc). When you analyse price-points you will find that the margins are very small (although Takealot does get preferential pricing from the distributors due to volume) and neither Kalahari nor Takealot has ever broken even since their existence. IMO, the 1bn Rand fund run from last year would have been burned through by the end of this year and I will not be surprised to see another big fund-run come in within the next few months.

Bottom line is that loyalty in e-commerce is not based on how good your service or how cool your brand is, but is merely based on if your product is sold for the lowest possible price compared to competitors (or if you play in verticals which others can not support).
 

alqassam

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Not really. Takealot and Kalahari use vouchers to push sales through and not to acquire new customers. The e-commerce customer base is pretty static with a predictable growth rate as internet becomes more accessible and people become comfortable with online ordering and payments. With any business you will initially pay an acquisition cost to sign up the customer and then need to create some stickiness to keep the base. Everyone thought that with the Takealot/Kalahari merger their customer base would be 1+1=2, but in fact it was more like a 1+1=1.2 as most Kalahari customers already shopped on Takealot and vice versa.

Vouchers result in instant cash burn and invite fraud as people will sign up multiple accounts and this results in over-inflated figures of a customer base. When a business subsidises shipping and then throws in a voucher, a product is not even sold at break-even, but mostly at loss (what you guys do not take into consideration is the OPEX burn when it comes to running the business with a few hundred staff, warehouses as well as millions spent every month on radio/SEM etc). When you analyse price-points you will find that the margins are very small (although Takealot does get preferential pricing from the distributors due to volume) and neither Kalahari nor Takealot has ever broken even since their existence. IMO, the 1bn Rand fund run from last year would have been burned through by the end of this year and I will not be surprised to see another big fund-run come in within the next few months.

Bottom line is that loyalty in e-commerce is not based on how good your service or how cool your brand is, but is merely based on if your product is sold for the lowest possible price compared to competitors (or if you play in verticals which others can not support).

That cash burn would have went to marketing in any event. Ecommerce now is all about gaining market even amazon.com makes losses and trades at crazy multiples.all because of the future earnings potential.
South african Ecommerce should grow due to penetration and growing middle class. But the US is still low at less than 5% of total retail sales
 

smiley-zn

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Not really. Takealot and Kalahari use vouchers to push sales through and not to acquire new customers. The e-commerce customer base is pretty static with a predictable growth rate as internet becomes more accessible and people become comfortable with online ordering and payments. With any business you will initially pay an acquisition cost to sign up the customer and then need to create some stickiness to keep the base. Everyone thought that with the Takealot/Kalahari merger their customer base would be 1+1=2, but in fact it was more like a 1+1=1.2 as most Kalahari customers already shopped on Takealot and vice versa.

Vouchers result in instant cash burn and invite fraud as people will sign up multiple accounts and this results in over-inflated figures of a customer base. When a business subsidises shipping and then throws in a voucher, a product is not even sold at break-even, but mostly at loss (what you guys do not take into consideration is the OPEX burn when it comes to running the business with a few hundred staff, warehouses as well as millions spent every month on radio/SEM etc). When you analyse price-points you will find that the margins are very small (although Takealot does get preferential pricing from the distributors due to volume) and neither Kalahari nor Takealot has ever broken even since their existence. IMO, the 1bn Rand fund run from last year would have been burned through by the end of this year and I will not be surprised to see another big fund-run come in within the next few months.

Bottom line is that loyalty in e-commerce is not based on how good your service or how cool your brand is, but is merely based on if your product is sold for the lowest possible price compared to competitors (or if you play in verticals which others can not support).

Some very good points made
 

MagicDude4Eva

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That cash burn would have went to marketing in any event. Ecommerce now is all about gaining market even amazon.com makes losses and trades at crazy multiples.all because of the future earnings potential.
South african Ecommerce should grow due to penetration and growing middle class. But the US is still low at less than 5% of total retail sales

I think it is an illusion, that just because you gain market share will make you the dominant player. There are a number of reasons why eBay has lost traction and for example had to offload Paypal. Companies like Alibaba "came out of nowhere" but have a different value proposition for customers than just giving cash/vouchers away to (Google "Alibaba singles day"). I guess the point I am trying to make is that traditional e-commerce and brick-and-mortar in SA sit with the same customer base who are highly brand disloyal and heavily cost-focused and the large untargeted audience is unbanked (when it comes to online payments) or not on the net. Product and service switching from Millennials is highly influenced by a change in their financial situation and value-/price is a major consideration for 18-33 year olds.

Similar to Groupon, eventually people will face "voucher-/deal-exhaustion" - i.e. you are just not going to buy something because you get 50 bucks off. The companies offering vouchers will record high voucher-redemption rates but I would think that companies like Takealot will face a good 40-50% bounce rate and I would be surprised if they achieve a click-through-rate on mail higher than 4% (with an open-rate less than 20%). I agree - it is all about the marketing spend and burning cash, but it is not a sustainable business as margins on products from manufacturers are relatively static - hence my comment that another funding run is going to be imminent as the company has failed to be innovative and the likes of Rocket Internet / Alibaba will enter the local market deploying the same business model with substantially more cash than local players.

Sorry for distracting the "I need a voucher to buy stuff"-thread for a brief moment....
 

Vis1/0N

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...and neither Kalahari nor Takealot has ever broken even since their existence. IMO, the 1bn Rand fund run from last year would have been burned through by the end of this year and I will not be surprised to see another big fund-run come in within the next few months.

Bottom line is that loyalty in e-commerce is not based on how good your service or how cool your brand is, but is merely based on if your product is sold for the lowest possible price compared to competitors (or if you play in verticals which others can not support).

Businesses based on investors gambling on a big payoff...they know the risks. I have no loyalty to them.
 

SeRpEnT

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Got several emails with this line "Good news, the following product in your wishlist is now on sale while stocks last: "
Each one of the emails for one of the blurays on my Takealot wishlist.

But these so called sale price for each of the movies are EXACTLY the same as before. Same price as yesterday and day before.
Bloody crooks. Do they really think their customers are morons?
 

airborne

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If anyone has a R100 off R250 voucher that's not going to be used please drop me a pm, would be greatly appreciated.

Have a fun filled weekend everyone, let the excitement grow and the tequilas flow
 

RichardG

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Got several emails with this line "Good news, the following product in your wishlist is now on sale while stocks last: "
Each one of the emails for one of the blurays on my Takealot wishlist.

But these so called sale price for each of the movies are EXACTLY the same as before. Same price as yesterday and day before.
Bloody crooks. Do they really think their customers are morons?

Agreed. It's like the fnb super saver - did anyone receive such communication from FNB I didn't, was disapponted.
 

Crossing_Swords

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The super savers email I received was only for baby stuff, and the voucher attached to it, R200 off of an innjoo phone. It wasn't much help. If someone wants to buy that phone, they are more than welcome to take my voucher.
 
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citizensa

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The super savers email I received was only for baby stuff, and the voucher attached to it, R200 off of an innjoo phone. It wasn't much help. If someone wants to buy that phone, they are more than welcome to take my voucher.

Can you please send me this voucher I was going to buy that injoo phone.I would greatly appreciate your help. Cheers
 

byronjason

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R50 off R150 Expires tonight

WM69-J4UB-QXC4
DRF5-3C3R-NV3X
83CZ-9FMS-TS8U
Z6ZT-AHQ5-JX7C
82B9-EZ3W-HTYK
 

cpu.

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Loaded a voucher on my my account that was accepted. Don't want it anymore. If I don't checkout, am I hogging it? If so, how do I remove it?
 
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