The evolution of Teljoy

Teljoy

In a country with a notoriously high rate of business failure ‐ the Small Business Institute estimates that as many as 70% of new businesses in South Africa will fail in the first two years of operation ‐ it’s certainly uplifting to hear of a business that is celebrating its 50th year of operations. Teljoy, which for many South Africans has an iconic status as the firm that gave families access to appliances and furniture over the generations, marks 50 years since it first registered as a business in June 1969.

Getting the business off the ground 50 years ago required a huge gamble. Teljoy’s founder, Theo Rutstein explains: “When I registered the company and started advertising our offer – a television in the home of every subscriber at a time when there were no televisions in the country – we had no idea how long it would take until we could actually deliver the product to our customers. It was 1969, and I was aware that South Africa was way behind the rest of the world in terms of citizens having access to televisions.  I saw this offering as a huge opportunity for a new business venture.”

With the Americans successfully landing on the moon, a short while later, Rutstein was acutely aware of the huge excitement all over the world ‐ with millions of people across the globe glued to television sets, watching the moon landing. Except that here in South Africa, no one was able to watch any of this amazing world news. Rutstein saw this as an opportunity.

Rutstein registered the company in June 1969, hoping that he would be able to deliver televisions to South Africans one day in the future. Naming it ‘Teljoy’, the name reflected his vision for the future ‐ that South Africans would be able to enjoy television at some point in the years to come.

“Although I knew it would take some time until we could bring television into the country because we had to first convince the government of the day to allow this, I also felt that the potential was there.  Remember that, at that stage, the South African currency was way stronger than it is against other currencies today, so we were essentially a wealthy country – certainly as regarding the middle‐class.”

“The fact that people wanted access to TV was made very clear by the large number of people who signed up to Teljoy in 1969, knowing that they would not be able to get a hold of a TV at the time. We advertised our business in the Sunday papers, offering that members of the public could sign up and be assured that they would have a TV in their homes. Within two weeks, over 10 000 people had signed up. They didn’t have to spend any money at that stage, but it gave me a good indication of the level of interest in the product among the public,” says Rutstein.

Once the interest had been proven, Rutstein was able to secure the funding needed to buy the stock to service the thousands of customers he had signed up. And the banks were more than willing to get involved, seeing the significant potential that the business offered. The first broadcasts commenced in 1976, by which time Teljoy was well on its way to becoming a very successful business.

The initial model was a rental one: a customer would rent a TV on a month‐to‐month basis. This later evolved to the current Teljoy rent‐to‐own model. “Both these approaches are geared to make it more affordable for people to acquire appliances. Today, Teljoy offers a range of appliances, electronics and furniture, and has served multiple generations of South Africans,” Rutstein says.

Teljoy’s business has grown significantly over the years. Another big milestone for the business was when it introduced cellphones to the South African market. Vodacom was the only other business doing so at the time, and it acquired Teljoy’s cellular arm at a later stage so that it had greater dominance over the enormous and growing cellular market.

Teljoy became a listed company in the 1980s. According to Rutstein, “This was a time when I was really thrilled about how business success can change lives. The listing meant that some of the individuals who joined the business in the early days became instant millionaires, and there’s no better way for the founder of a business to say thank you to the people who were there from the start.”

Today, Teljoy operates as an online retailer of appliances, electronics and furniture. The need to change its delivery model became clear as technology developed, and today the company has no brick‐and‐mortar outlets, but it continues to service thousands of South Africans online. Current CEO, Rami Sassen, has every reason to believe that it’s a business with a bright future ‐ and certainly another 50 years is very likely.