E-commerce grows in South Africa

The number of Web users in South Africa is growing at a steady pace and, quite significantly, the number of users who have been online for five years or longer is growing too, making a solid case for businesses in this country to begin seriously considering an e-commerce strategy to remain current in a changing market.

“E-commerce is an inevitable progression for South African businesses especially when you consider online giant, Amazon.com, which records more online turnover than our two main local competitors, Pick n Pay and Shoprite, combined.”

Stop blaming Telkom, access

Andrew Smith, co-founder of Live Alchemy, concurs saying that while the rest of the world's traditional retailers are often supplement their brick and mortar business quite successfully online, South African businesses are seemingly reticent to follow suit. He says Telkom and the lack of Internet access have taken the blame for slow e-commerce uptake for far too long.

“If you walked around a shopping centre today you'd find that almost everyone there has access to high-speed, always on Internet, be it at home or work,” he says. “The reality of the situation is that traditional retailers simply don't know where to start with their online efforts. They think ‘e-commerce' and see ‘high tech' and become intimidated by the unknown.”

Flynn agrees and says that e-commerce is a cloudy concept for many South African business owners and says the perception is that e-commerce is expensive, difficult to get right and only for the technically savvy younger generation. “These perceptions are slowly changing due to the number of examples of successful companies operating in this field today, like Kalahari and Yuppie Chef.”

Successful specialists

Yuppie Chef's Smith says, “Big name retailer, Game, has yet to dip its toes in the water and, while Woolworths and Pick n Pay have made treads online, they don't offer a national footprint. This has opened the door for specialist online brands like Yuppie Chef, Kalahari, eDreams and the like and, while turnover is still tiny compared to their offline counterparts, business is growing at a rate of 30% per year and it's going to be difficult for latecomers to compete with them.”

Smith says that buying online requires a big leap of faith for South African consumers but that once trust has been solidified, it will be near impossible for late entry competitors to win over existing online consumers.

Flynn adds that the Web has grown up, users are more experienced, standards have begun to take shape and Web-based solutions for e-commerce are more affordable - all of which has laid the groundwork making the online market an increasingly attractive. “Working in partnership with Live Alchemy, local e-commerce specialists, has enabled us to provide a range of consulting and implementation services to assist businesses that rely on traditional marketing and distribution methods to develop and implement a successful e-commerce strategy that works for them,” he says.

Choose partners carefully

However, e-commerce isn't necessarily for everyone, Flynn warns. “Like any marketing and distribution method, some implementations and conditions around the implementation are better than others, which directly affect the bottom line. However, e-commerce does offer several advantages over the traditional, including not having to stock products before selling them, not needing expensive retail space and being able to showcase products to an international market as opposed to just a market local to specific stores.”

One thing businesses should keep in mind when they decide to explore e-commerce is their partner of choice, he adds. It is important that the company assisting business in transitioning to online selling has real-world experience in selling online. The intricacies of online payment methods, delivery companies, combating fraud, packaging, customer service and user experience can only be learned firsthand and it is through working with companies like his, that users can experience a trouble free move into the online space.