E-commerce in SA: Now and then

Currently, around 3.28 million people in South Africa have access to the Internet. Of these only around 500 000 to 600 000 are transacting online. Pretorius explains, "Several critical factors are hampering the uptake of e-commerce in SA. Telecommunications, and the fact that it was not deregulated as soon as we thought, has a big cost implication on the time that people spend on the Internet. They are simply not prepared to spend hours on the Internet browsing websites. At kalahari.net, we streamlined our processes to ensure that, from an easy search function to hassle-free registration and check-out process, our customers don't have to spend hours online looking for products and filling in endless forms to register as a customer."

According to Pretorius, the supply chains in SA also need streamlining. "Kalahari.net's business model is not to keep stock in our warehouse, meaning that each time a customer orders a product, it is ordered from the supplier directly. Once the products arrive at the warehouse, there is no time wasted and the products are packaged as soon as it arrives (unless we are still awaiting another product that is part of the same order). So the hold-up comes with getting the products from suppliers timeously and this is what dictates the delivery times that online retailers in SA can offer their customers."

US online retail sales are expected to reach $65 billion in 2004 according to Jupiter Research. While South Africa has a smaller base, proportionally South Africans still don't spend nearly as much on online transactions. So is there hope for e-commerce in SA? "Definitely," says Pretorius. "E-mail is usually the first point of entrance for people starting to use the Internet. As they become more and more comfortable with the Internet, they will move on to other activities such as online banking. Our challenge is now to convert the Internet bankers into Internet shoppers and of course, once our telecommunications industry has settled, to get more people to connect to the Internet. But I have no doubt that the convenience of online shopping and the range available online (kalahari.net for instance offers more than two million products on the site) will stand e-commerce in good stead in years to come."

In line with its strategy to become a one-stop-online-shop, Kalahari.net recently added four new shops to their offering; Makro, Computicket, a photographic shop and a health shop. "Unlike online shopping malls, we are not an enabling platform that simply aggregates a whole lot of vendors that are responsible for their own delivery, customer service, etc. Our customers will only interface with kalahari.net and we are responsible for all sales, customer service and delivery. We create an online community with one point of entry and exit," says Pretorius. He adds that kalahari.net spent a lot of time on establishing credibility in its core product ranges (books, music, video's/DVDs and games) before expanding. They also leverage the expertise of third parties to add the new shops.