When the likes of Mark Shuttleworth pioneered internet technologies for South Africans, many internet based websites popped up to capitalize on South Africa's growing internet users. Today, that user base totals over 30 million individuals according to recent statistics. In recent times, one of the biggest uses of the web has been using it to research and even buy cars. Many platforms compete for motor vehicle buyers and general enthusiasts. Some of these popular sites are our very own cars wesbite, and Auto Trader.

For these websites, simply listing cars for sale doesn't cut it any more. Innovative ways of attracting car buyers are the way forward, thus, there's been a trend to shift to mobile-friendly websites, and native applications on Android and iOS devices. This in turn has seen spectacular increases in the number of visitors to those sites that have implemented this and more. AutoTrader.co.za is one of them. The website has certain characteristics that make it a benchmark, a good investment, and worthwhile investigating.

Trader Media Group Deal

AutoTrader's boss is moving to a digital-first strategy, in layman's terms that means the company's websites will be the main driver of growth moving forward. That's why the business is being sold for a whopping R25 billion! That's definitely a crazy number to comprehend. AutoTrader has two owners, The Guardian Group, which is selling its remaining 50.1% stake to Apax Partners (the other owner), which is an investment company that also has similar investments in the USA. AutoTrader makes money, whether its in South Africa or England, it just prints the thing, and this is why.

To put things into more perspective, South Africa has just four main media groups. These are Naspers, Times Media, Caxton, and African Media Entertainment. AutoTrader has a strong partnership with the biggest, Naspers. While the other groups have various automotive classifieds that they own. The roughly R25 billion that Apax Partners is valuing AutoTrader.co.za's parent company means it's size would be surpassed only by the Cape Town-based Naspers. Times Media is worth about R2.9 billion, while Caxton and AME are valued at R6.7 billion and R663 million respectively. I didn't want to do the maths for you but the Auto Trader owner sits at more than two times the amount of money of South Africa's 3 biggest media companies combined.

A Brief Background About AutoTrader.co.za

In 1998, yes, that's 16 years ago, the South African version, known as AutoTrader.co.za went live. This was a first in the country, and showed a significant realization that e-commerce would play a huge role in the way car dealers interact with their potential customers. To leverage this, Auto Trader South Africa, with the financial backing of its UK-based parent company, Trader Media Group, became South Africa's most popular motor vehicles classifieds website.

The final years of the previous century where the era of Telkom's dial-up lines, those things that made the screechiest of sounds, and just as you browsed your soon-to-be BMW 3 Series, someone in the house needed you to disconnect from the internet so he or she could make a phone call. That's pretty much all gone now, and sleek websites that give great user experience have taken over from the old architecture of typical classifieds sites.

AutoTrader.co.za is not the only such car sales website in South Africa, but what it's been able to do is leverage on its print magazines, and partner with other big websites (mostly news-based), to popularize its own website. This is good business, obviously, but is being big necessarily being the best?

The website started out as an extension of an already established brand, the magazine, Auto Trader. It was launched in South Africa in 1992, as the local version of John Madejski's 1975 magazine, Auto Trader of the UK.

Auto Trader South Africa Magazine

The Auto Trader first sold for 50 cents 22 years ago. With just 24 pages, it wasn't obvious that it would become so popular. After all, there had been auto industry themed magazines in SA for a long time. Breaking records is great in the print industry, and after just ten years since its first publication, the 500th issue had 500 pages of good quality cars to browse. Another ten years since that record, in 2012, the 1000th issue was circulated, and that helped the re-launch of their new website. It's been a great two decades for the print edition, but the website has slowly eaten away the magazine's circulation.

Author: Pierre Theron