Kalahari's Marketplace beats expectations

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 23 Mar 2011

Online retailer's online Marketplace platform has done better than expected since launching less than a year ago.

The retailer launched the Marketplace as a platform to allow users to buy and sell new or used books, CDs, DVDs, games and electronics to its consumer base. The company charges a commission fee for items sold on its site and in return offers a secure platform that guarantees payment.

CEO Gary Novitzkas says the company had expected to list 120 000 products during the first year of the Marketplace's existence. Instead, he says, the portal beat expectations and about seven million items have been put up for sale.

“ Marketplace has exceeded all our expectations and has achieved record numbers since launching in July 2010.”

The online retailer was launched in 1999 and claims to be SA's largest online retailer of books, e-books, music, DVDs, games, cameras, and electronics.

Novitzkas says the Marketplace platform is growing in double-digit user figures, and added a million new products in February and March alone. The local site's Marketplace is similar in concept to those offered by international sites and Barnes & Noble; however, it is not a bid system such as eBay.

A seller can download information about the product being sold with an asking price. A buyer makes a purchase by putting the money into an escrow account held by Kalahari and then, once the product is received, the money is released to the seller.

Novitzkas says is “very happy” with the sales figures. He adds that it expands the retailer's product range as users offer products that does not carry, which helps drive traffic to the site.

Some small businesses have achieved such a level of success that they have closed their bricks-and-mortar stores and are now using the Marketplace as their primary trading platform, the retailer says.

Novitzkas says the company has recently redesigned its portal, and will now be looking to add new categories to its offering. He says the company is seeking areas within the retail segment where it can apply its model.

Currently, more than a third (35%) of buyers order books, 30% buy DVDs, 18% purchase games and 15% buy CDs. Only 2.3% buy electronics such as computers and cellphones. Novitzkas expects the recently launched electronics category to catch up quickly to other line items.