Naspers - which is the largest media group outside of the US and China - has seen its Internet unit grow 44% in the first half of the year, outpacing gains from its pay-TV unit thanks to the e-commerce boost.
Naspers' Internet unit accounted for R35.8 billion of its overall R34.4 billion income (after eliminating equity-accounted investments) in the six months to September, as revenue gained 20% year-on-year.
Its pay-TV unit - its second largest contributor - grew its top line 18% to R20 billion, while e-commerce - its current focus area - gained 43% to R12 billion.
The listed company notes e-commerce - which is accounted for as part of its Internet division - continues to grow as it invests in formats such as e-tail, classifieds and payments. "These are proven winners for customers and gaining market share from other formats."
Naspers' online classifieds footprint now covers about 40 countries, and it has inked a deal with Schibsted, subject to regulatory approval, that will extend its reach in Latin America and South East Asia.
Zooming ahead
The media group notes e-commerce is its fastest growing division, but is still reporting trading losses (R2.4 billion) because of heavy development spent - which came in at R3.6 billion. The company's development spend was the reason behind Fitch Rating's downgrade of its credit status to junk.
Naspers notes its classified sites now have 796 000 active daily listings and 1.6 million active customers a day, a more than 70% increase for each metric quarter-on-quarter. "Competition remains aggressive, but we have outgrown our competitors on the measures that matter most."
Its pay-TV division, however, continues to be profitable, with trading profit coming in at R5 billion, an 11% decline as it continues to invest in its digital TV offerings on the continent and in online services to expand what South Africans can watch. Its base gained 342 000 to 8.4 million homes.
Naspers also benefitted from investments in Tencent and Mail.ru. Vestact says in a note to investors that the listed company is "really, really" pushing its e-commerce business, the company's current big drive.
Vestact adds Naspers earns 72% of its revenue offshore. However, CFO Basil Sgourdos cautioned the second half of the year, traditionally the most active part of the year, will see more spending as it seeks to capitalise on the holiday season. "Our goal remains to develop online classifieds, e-tail and DTT to deliver future growth and create value over time," he added.
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