Naspers’ decision to pull the plug on some well-known South African eCommerce websites – SACamera, 5rooms, Kinderelo, and Style36 – was described as a ruthless move which destroyed some great ventures.
On Friday, 21 February 2014, MIH Internet Africa Group, the Internet arm of Naspers in Africa, said that it was considering closing some non-core brands such as Style36 and 5 Rooms.
This statement followed a day after the four of Naspers’ eCommerce websites were taken down without any warning to users.
Naspers said that it will be placing all its efforts behind Kalahari. The company added that this decision does not affect other Naspers subsidiaries with e-commerce investments in Africa, including Media24.
Naspers’ decision slated
Naspers’ decision to suddenly cull the websites without telling customers, and possibly not giving staff enough warning, drew sharp criticism from some people.
“Very, very unprofessional if this is true,” said one commentator. “They post record profits but then they go and retrench workers. Greed Greed Greed!” said another.
Naspers’ decision to close down the online properties was described by one source close to the development as a “ruthless corporate decision that has destroyed a venture that was growing”.
“All start-ups should be wary of getting into bed with the likes of Naspers. It’s a massive set back,” he said.
According to the source, some of the staff members were only informed on Thursday, 20 February, about the plan to shut down the websites.
“There was no warning, no discussion or negotiating – nothing,” he said. “The staff members are still shell-shocked,” he said.
Another source said that some of the staff were informed a week before the sites were taken down.
“All staff have been given notice about a week ago. Not great considering the timing were most people are just getting back on their feet after holidays,” he said. “It is also not like Naspers has any financial reasons.”
Uncertainty about Africa Internet Accelerator’s future
MyBroadband asked Africa Internet Accelerator (AIA), who is behind Style36, 5Rooms and Kinderelo, whether Naspers also pulled AIA’s funding and whether they were going to continue to operate.
Remo Giovanni Abbondandolo from Africa Internet Accelerator said that they could not immediately answer this question.
Abbondandolo could also not say whether they are looking for alternative funding to save the websites which were closed down, and the AIA venture.
Naspers spokesperson Meloy Horn said that they do not comment on specific performance of their ventures, but added that this decision was made for strategic and not for performance reasons.
“All the affected businesses are still small,” she said. “As mentioned before, as consultations are still ongoing, I am unable to provide any more information at present.”