Online retailer Snatcher has officially closed its doors after over eight years of operation. The company, owned by Dirk van Greuning, entered voluntary liquidation at the end of August following a series of setbacks that severely impacted its business.
Several concerned customers raised alarm after visiting Snatcher’s website and being greeted with a message: “Please be advised that DHD Investments T/A Snatcher Deals has ceased all operations. Further details to be provided.”
According to Van Greuning, the company, DHD Investments, had maintained an annual turnover exceeding R25 million since 2021. The store had carved out a niche in the South African market by importing low-cost, off-brand electronics from China.
However, the arrival of Chinese eCommerce giant Temu in January 2024 posed a significant challenge to Snatcher’s business model. Temu began selling similar products at prices Snatcher could not match.
“Aggressive Chinese market players, such as Shein and Temu, leveraged substantial marketing budgets and have taken advantage of tax loopholes to flood the South African market with highly competitive pricing,” said Van Greuning.
“Their ability to offer lower prices due to these loopholes has significantly undermined our competitive position. The disparity in pricing and market strategy has made it untenable for us to compete effectively, leading to unsustainable financial losses.”
In response to rising competition, Snatcher tried to adapt, but their customer acquisition costs skyrocketed as they were squeezed on both pricing and marketing fronts.
Before Temu entered the market, Snatcher’s cost-per-click on Google ads was between R0.60 and R0.70. However, Temu’s aggressive marketing strategy pushed that cost to R1.80 almost overnight. The cost climbed even higher as competitors like Shein and Takealot reacted to the increased competition.
With Google ads accounting for 60% to 70% of Snatcher’s revenue, this sharp increase in marketing costs severely impacted the company’s bottom line. To make matters worse, Snatcher’s Google account was suspended twice, further disrupting its ability to generate online sales.
Van Greuning shared that Google suspended their account in March for “suspicious payment” after they switched from daily to monthly billing to improve cash flow. Although the suspension was lifted after two weeks, the company faced a similar suspension in May for “misrepresentation,” further limiting their online operations.
“These suspensions severely disrupted our online operations, limiting our ability to attract and retain customers through digital channels,” Van Greuning explained. “The resulting financial strain has placed immense pressure on our business, making it increasingly difficult to maintain operational viability and meet financial obligations.”
The final blow came when internal fraud within the company was discovered in mid-August 2024. Van Greuning explained that employees were using coupon codes to make large purchases without any money being deposited into the company’s account.
“On the weekend of 17 August 2024, it came to light that our internal staff had been engaged in fraudulent activities,” said Van Greuning. “Specifically, employees were using coupon codes to make large purchases, with no money being deposited into our account.”
The fraud was facilitated by Snatcher’s system, which allowed customer support representatives to issue vouchers to clients who opted for store credit instead of a refund. Despite having some safeguards in place, the perpetrators were able to bypass these by creating new accounts with fresh email addresses.
Van Greuning stated that the office was closed, and all laptops were confiscated to conduct an internal investigation. However, the damage had already been done.
“This breach of trust and integrity not only exacerbated our financial difficulties but also undermined the operational stability of our business,” Van Greuning said. “The fraudulent activities were the final blow to our already precarious financial situation, compelling us to pursue liquidation.”
While the website was accessible until recently, all payment gateways had been disabled, preventing customers from placing new orders. Van Greuning confirmed that customers with outstanding orders were being contacted and provided with claim forms.
Snatcher still has some assets, including its warehouse and remaining stock, which will be auctioned to pay creditors.
“After the auction has taken place, the liquidator will complete the administration,” Van Greuning said.
“I am unfamiliar with the entire procedure, but the liquidator, an expert in this field, will handle it by being in contact with all affected.”