Naspers wants to pump more money into its South African food delivery business to muscle out competitors like Uber Eats.
The company, which has raised about R151bn by trimming its stake in China’s Tencent and selling its shares in India’s Flipkart, had agreed to speed up its investments in South African food delivery business Mr D Food, Naspers CEO Bob van Dijk said on Wednesday.
"We have agreed with them to step up the game there."
Mr D Food was "doing extremely well" and SA’s online food delivery market was poised for rapid growth. "If you look at the penetration of online food delivery in SA compared with some other markets where we operate, I’d say it’s still very early days, so I think that business can grow at a factor of 10, 20 or more times in the next few years," Van Dijk said.
The company is competing with businesses such as Uber Eats and OrderIn.
Nesan Nair, a senior portfolio manager at Sasfin Securities, said food delivery "is a great business" that was "an urbanisation play".
"Globally, as urbanisation takes place, both partners in a household have to work and nobody cooks anymore," Nair said.
He said that Naspers could look to deploy some of its new war chest into European food delivery business Delivery Hero, in which Naspers already has a large stake.
Nic Robertson, Uber Eats’s GM for the Middle East & Africa, has said he expected the online food delivery market to grow faster than the online retail business, because of the convenience of delivery apps, including the ability to track orders.
Online sales valued as a proportion of the overall retail market have recently crossed the 1% mark in SA.