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Monthly Archives: December 2013

The future of e-commerce in SA

Mobile, online-offline convergence and simpler payment methods paint the landscape for where e-commerce is headed in South Africa, according to Luke McKend, country director for Google South Africa. Speaking at the uAfrica eCommerce Conference in Sandton on Wednesday (11 September 2013), McKend presented the challenges of doing e-commerce in South Africa, and painted a picture of what the market will look like in the next few years, according to trends seen by Google. According to McKend, the key challenge faced by online stores in South Africa is to deliver on the promise of e-commerce – to gain loyal customers through meeting expectations and provide a stable, trustworthy and secure service. Looking at the South African e-commerce market, McKend highlighted that the country is projected to see 29.8 million Internet users by 2016, with a 25% increase in online spend anticipated this year. Notably, McKend noted that, in 2014, South Africa is expected to have 80% smartphone penetration as mobile operators such as Vodacom and MTN are working to bring “sophisticated” devices to more people at a more affordable price. “The web is mobile,” McKend said, stating that most people’s first interaction with the Internet in South Africa will be through a mobile phone – and Google SA stats reveal that there are more mobile searches than desktop searches in South Africa. The future of e-commerce Quoting data from World Wide Worx, uAfrica head Andy Higgins said that, in 2013, South Africans are projected to spend as much as R4.2 billion online – excluding air tickets – representing an estimated 25% growth in the market. According to McKend, the “store of the future” will a convergence between physical retail and online – where customers don’t discern between buying something online or offline, but view purchases and transactions as “I’m buying this from a store.” The gap between what is considered “commerce” and what is considered “e-commerce” is going to narrow, McKend said, and technology is going to be core to the transition. To this end, McKend said that all stores will need to make sure all their products are available online – if not for purchase, at least for review. “We need to make sure that all the inventory we actually have lives in the cloud,” he said, adding that users need to be able to see everything retailers have, online. Users who don’t see products online, assume it’s not available [...]

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The Ecommerce boom is here and growing!

The South African market is adopting ecommerce at a rapid pace. With more and more consumers becoming comfortable with using online platforms to make purchases, It presents opportunities for businesses and brands especially in an environment of slowing retail sales, as reported by Statistics SA on Wednesday. According to Claude Hanan, Co-founder of design curated website Citymob.co.za, “Ecommerce in SA is quite a defensive industry at the moment. Even when broader macro trends point to muted consumer spending, the number of shoppers becoming online shoppers is growing faster than the decline in basket sizes as a result of falling disposable income.” We are still very far away from being in a position where all those who WANT to shop online, can and do shop online. If one takes a deeper look, South Africa has 3% ecommerce penetration (being the % of total population who shop online). This equates to about 1.5m people. This figure is expected to double by 2016 to 6% or 3 million people, but Hanan feels it will more than double. “ There are 13.2m internet users in SA currently. However, a measure we prefer looking at – which has been identified by Arthur Goldstuck, is the number of internet users who have been online for LONGER than a 5 year period. Currently this sits at 4.6m.” But a point Hanan is eager to make is that no-one is comparing the 1.5m currently active online shoppers to the 4.6m potential user base. If you do, you see that only 32% of people, who are ready to shop online, actually are shopping. Why is this? There are a number of reasons but top contributors are awareness, trust and quality of offering. The market is growing very quickly. Again, according to research by World Wide Worx, online retail is growing at 25-35% per year and is expected to reach R4.2bn in 2013. “It’s not a case of local online companies getting better in the next few years, they are getting better right now. It’s happening today. More users are online, shipping is faster, product offerings are better, client service is smoother. So the tailwinds in the industry are legitimate and we are benefiting massively from that and are hugely excited about the growth of ecommerce in SA over the next 5 years.” Citymob took advantage of the opportunity and have seen phenomenal growth across the board. “All KPI’s are [...]

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South Africans embrace online shopping and Cyber Monday

This year saw a rise in online spending across the globe, with USA reporting a 20% increase in online shopping on Cyber Monday as shoppers snubbed physical retail stores in favour of missing out on the holiday queues. Locally we are coming to the party, with recent report showing that 9.5% of South Africans are planning on doing their festive shopping online in 2013. Picking up on this trend, Style36.co.za and 5rooms.com, two of SA’s leading online fashion and furniture retailers, proved that SA is indeed embracing online shopping by breaking their sales records in one day with the launch of their Cyber Monday campaign. Offering customer the opportunity to shop top local and international brands at up to 80% off for 24 hours only, the campaign not only showed that South Africans are shopping online but that they are willing to spend large amounts of money when given the right opportunity. Style36, SA’s ultimate online style destination, set a record number of sales, receiving over 5000 orders in just 24 hours. For the first time ever, the site received over 100 000 visits in one day, a clear indication that South Africans are curious and excited about the prospect of shopping online. Online furniture, homeware and lighting store, 5rooms, went on to record their biggest sale day since inception in 2012 with close to 1000 orders being placed in the 24 hours provided. In total South African consumers spent over R3 million shopping on these two online stores alone. “We are very pleased with the results of our first ever Cyber Monday campaign and judging from the results we achieved, South Africans from all over the country are embracing online shopping. The most positive aspect of the campaign are that we not only managed to give our already loyal shoppers what they want that being incredible deals but also increased our customer base by over 60% in just 24 hours, introducing an entirely new audience to online shopping,” says Remo Giovanni Abbondandolo, Head of Marketing at Style36 and 5Rooms. Cyber Monday in SA proved to be one of the biggest online events of year a promising indication as to where e-commerce is headed in this country. If companies like Style36 and 5rooms continue to set the standard locally, South Africa is sure to hit the big time on the world stage in coming years. This article was contributed to [...]

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