Category Archives: Ecommerce News
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 [...]
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 [...]
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 [...]
South Africans Highly Satisfied with Online Shopping – MasterCard Survey
Online shopping sites that offer an easy, convenient shopping experience attract loyal customers Tweet: #MasterCard Online Shopping survey reveals online retail trends in South Africa http://bit.ly/122NEFR Cape Town, South Africa – 27 June 2013 – The latest MasterCard Online Shopping Survey has revealed that a substantial 91% of South Africans who shop online are highly satisfied with their overall experience, a 4% increase from the 87% who said the same thing in the 2012 survey. A further indication of South Africans’ positive sentiment for online shopping is that 76% of respondents return to an online shopping site that they have used before and 74% expressed that they felt it was both easy and convenient to make online purchases. These figures show slight increases – 2% and 1% respectively – when compared to the previous survey’s results. Despite this positive sentiment towards shopping online, the number of South Africans accessing the Internet to shop online is down 4% from the previous survey, with 54% of respondents saying that they usually use the Internet for shopping. “While online shopping continues to be a regular Internet activity for more than half of South Africans who are actively online, there is a slight shift downwards in their online purchasing behaviour, which could be attributed to the slowdown recorded in the economy during the survey period,” says Philip Panaino, Division President, MasterCard, South Africa. “This is supported by The South African Reserve Bank noting in its fourth quarter review of 2012 that retail activity was disappointing as consumer spending was negatively affected by a pickup in inflation.” “There has been a rapid rise in the number of South Africans classified as active Internet users – those who fairly recently acquired regular access to the Internet – which means we are seeing a larger-than-ever base of users who have never shopped online before,” says Arthur Goldstuck, Managing Director of World Wide Worx. “These users add to South Africa’s population of more experienced Internet users – those who have been online for five years or more – which has increased significantly from under four million in 2012 to around 4.6 million this year. This means that even as the amount spent online keeps rising steadily – at more than 30% a year according to our data – the proportion of users shopping online is declining, which ties in with the decline MasterCard has recorded of active online [...]
7 Reasons Why E-Commerce is Growing in Africa
In early 2013, the Boston Consulting Group published ‘Ten Things to Know About African Consumers’. Seven out of ten of these continent-wide trends are likely to boost online retail growth and B2C e-commerce in Africa. I’ve listed the brief below. Optimism about the Future – African’s, with the exception of Northern African nations are exceptionally positive about future economic developments. By and large, Africans are very entrepreneurial. Partially due to a lack of established career paths and an inadequate formal education structure, ambitious individuals tend towards creating new opportunities. Techno- Freaks – There is wild craze for all things digital and the speed and scale the internet and technology uptake is driving major change and economic opportunities. From football clubs to soft drinks, the African continent loves the international brand. This is a big selling point for international players with a serious brand appeal of value add. Massive discrepancies are often found in official market data and real markets, which include parallel and informal sector sales, can often be much higher and reflect greater opportunities. Quality sells. Despite higher prices, a better value-add and long-term investment coupled with higher prices can conquer market share. Look at the Toyota brand, but there are many other examples to back this up. Successful, modern retail outlets, greater varieties and cheaper products drive the cognizant African consumer. The evolving retail preferences on the continent imply that if online retail can offer convenience as well as opportunities for cost-saving, then it has a bright future in the coming years. While online retail has a ways to go, more affluent markets in Africa are ready for the practice and as the rapidly growing economies begin to stabilize it is expected that a massive wave of online e-commerce will follow. Africa may be lagging in online stores and e-commerce, but with growing wealth and broadband availability a massive spike is expected of the 3-7 year period with growth of between 20-25% in the next 3 years leading up to it. For more see: www.bcgperspectives.com and for Online Retail Solutions & e-Commerce Author: Jonathan D. Novotny is an e-commerce evangelist and co-founder of the CloudShop/CloudSales online retail franchise.
The Yuppiechef cult: how a startup sparked a religion
The Yuppiechef success story has been well documented, but until now, no one has been able to explain exactly how the kitchen utensils e-tailer has managed to evoke the type of fervent support that has catapulted the Cape Town company well into cult territory. Yes, cult. Exhibit A: a Pinterest page dedicated to customers who have submitted photos of their pets in Yuppiechef packaging. The running theory is that Yuppiechef has mastered the art of customer service. It’s a strong hypothesis. Yuppiechef boasts 99% positive feedback — read worship — on customer service watchdog Hellopeter, as well as a consistent stream of accolades awarded on the basis of irreproachable customer service. Consider then that 60% of Yuppiechef purchases are from repeat customers and it seems an open and shut case — Yuppiechef is indeed a “customer service business who happens to sell kitchen tools”. Yes, perhaps being extra courteous and efficiently dealing with customer queries can explain the 300% year on year revenue Yuppiechef recorded in 2011. In 2012, Yuppiechef added to its staff of 16, reaching 54 by the start of 2013 — perhaps free delivery of its select product range, strong social media engagement and the handwritten thank you cards that accompany every purchase grew Yuppiechef’s revenue enough to sustain 38 new employees. Perhaps. A reliable source revealed to Ventureburn that Yuppiechef is currently recording gross annual revenue of R80-million with a 20-30% profit margin. When we approached the stealthy kitchen utensils e-tailer for comment, Yuppiechef marketing director and part owner, Paul Galatis, opted to keep the company’s figures private. Yuppiechef is not at liberty to discuss its financials, but then again, the company’s culture doesn’t particularly lend itself to that kind of thing anyway. “We don’t celebrate or measure our financial results. Instead we celebrate the constant stream of positive customer feedback that customers send to us and post online and we share it on a daily basis within our team,” Galatis told Ventureburn. We remain intrigued to have not received a flat out denial of the rumour, however. In 2011 Galatis revealed that Yuppiechef was “verging on profitability.” Given this knowledge, Yuppiechef’s confirmed 100% year on year growth in 2012 and the reliability of our source, we started exploring an alternative theory for the company’s apparent surge. Yuppiechef is a quiet overnight success, six years in the making. Today, the company boasts social numbers such as [...]
E-Commerce Companies Bypass the Middlemen – NY Times
When the founders of a start-up that sells eyeglasses online, Warby Parker, began investigating why designer glasses cost several hundred dollars, they discovered that everyone in the process was taking a cut: designers, manufacturers, brands, wholesalers and retailers. Warby Parker’s Manhattan headquarters includes a showroom. The company plans to open a stand-alone store soon. But what if they left out most of those people? “I had been to the factories and knew what it costs to manufacture glasses and knew the cost didn’t warrant a $700 price tag,” said Neil Blumenthal, a founder of the company. Inspired by glasses they found in their grandparents’ attics, the founders sketched a few frames, hired the same Chinese factories that make designer glasses and started selling directly to consumers online. By doing so, they eliminated enough of the cost to charge customers just $95 a pair. Warby Parker is part of a wave of e-commerce companies that are trying to build premium brands at discount prices by cutting out middlemen and going straight to manufacturers. They make everything from bedding (Crane and Canopy), to office supplies (Poppin), nail polish (Julep), tech accessories (Monoprice), men’s shoes (Beckett Simonon) and shaving supplies (Harry’s). The result is generally cheaper products for consumers and higher profit margins for the companies. Big retailers discovered long ago that controlling the supply chain benefited their bottom lines, which is why companies like Wal-Mart and Whole Foods sell many products under their own brands. At Macy’s and Kohl’s, such “private label” brands make up almost half of their sales. Start-ups have traditionally struggled to match those efforts. They do not have as much brand recognition as big retailers, and persuading consumers to take a chance on, say, Warby Parker eyeglasses instead of Prada’s can be difficult. “The challenge is, if you’ve never heard of the brand, you wonder, ‘Should I buy it when it’s 20 percent cheaper?’ ” said Raj Kumar, a supply chain consultant at A. T. Kearney. “Or should I buy a brand I trust?” What is empowering the upstarts now is the Web’s ability to reach lots of consumers without the costs of operating physical stores as well as a change in manufacturers’ willingness to work with small brands. The founders of Deal Décor, whose model was to sell furniture directly to customers, worked at Target and Home Depot Direct before starting their company. They said they saw an [...]
4 Good Reasons to Sell Online
Ecommerce sales are growing. Online sales topped $1 trillion worldwide for the first time last year and there are good reasons you should consider selling online now to start getting your share. There are really two kinds of businesses or entrepreneurs that should be considering ecommerce opportunities right now. Small, successful brick-and-mortar retailers that want to see their company grow. Individuals with a passion or interest that translate well into a niche or specialty online store. What follows are four good reasons for these folks — small brick-and-mortar retailers or inspired entrepreneurs — to consider opening an online retail business now. 1. You Can Make Money Selling Online Ecommerce sales for retail goods are growing faster than offline sales for brick-and-mortar stores. comScore, the trend-tracking firm, said that in spite of “continued economic uncertainty, 2012 was a strong year for retail ecommerce. Throughout the year, growth rates versus the prior year were in the mid-teens to outpace growth at brick-and-mortar retail by a factor of approximately 4x.” Separately, comScore noted that online retail sales grew 14 percent year-over-year in the fourth quarter of 2012, reaching $56.8 billion in the U.S. alone. The fourth quarter also represented the 13th consecutive quarter of positive ecommerce growth and the 9th consecutive quarter of double-digit growth. “It is clear that the online channel has won over the American consumer and will increasingly be relied upon to deliver on the dimensions of lower price, convenience, and selection,” said Gian Fulgoni, comScore chairman, in a release. Finally, U.S. retail ecommerce sales represented 10 percent of American retail spending, excluding food, gas, and automobiles, in the fourth quarter of 2012. This is the first quarter in U.S. economic history that electronic commerce represented such a significant part of the total available market for retail consumer goods. The fact that ecommerce is growing will not guarantee success for new online retail ventures. But is does offer an opportunity to make money selling online. Where opportunity exists, entrepreneurs can excel. 2. Shoppers Are Online Already In 2012, Google worked with Ipsos OTX, a market research firm, to survey potential holiday shoppers about their 2012 holiday shopping intentions. One of the key findings was that 80 percent of the 1,500 shoppers queried would research products and prices online before they would make a purchase. Clearly the Internet is the engine driving retail. Consider [...]
How to Sell Online in SA …and be Successful
By: Jonathan D. Novotny | Founder of CloudSales.co.za Most online stores operated by small businesses in South Africa fail to provide the user with an experience which leaves them at-ease and confident about their order being processed and delivered. The good news is, most of these problems are easy to avoid. Let’s look at the most common issues and the simple solutions. Design: The usual design issues arise from the use of: Outdated, irrelevant structures – Ensure that you are using the latest version of one of the global most widely implemented platforms – These are currently OpenCart, Magento, PrestaShop or Shopify if you want a DIY solution with no hands on support available. Weird, unusual or incomplete themes – If you want to be pro, just purchase a quality theme. This is like your skin, and regardless of how good your structure is, if your site looks like a ‘90s website, you aren’t going to inspire confidence. Just downright bad product photos – Get better ones. Give people what they want – If they are looking for contact details, don’t offer them a form to fill out, or if they want to pay and order online, don’t ask them to fill out an order form “…So you can get back to them.” Functionality: If you have time to set up your store and are an IT genius then there’s nothing stopping you from implementing this yourself. Responsive Design means the website scales down to the size and complexity of the device viewing it. For example, mobile devices see a narrow site with small product images and a simpler menu. Automatic Invoicing – Keep in mind that some shoppers may not want to pay via credit card, so give them an EFT option or have the system send them an automated invoice for payment. Integration with SA Payment Gateways – or just setup your own PayPal account & link to that. Integration with Courier Services Special offers, Coupons & Vouchers – You may not be planning on using this straight off, but if you are investing time and thought into your solution, best make sure that it has everything you need to build on. The Vital Final Touches: Use more & larger Product Images. Most insecurity online comes from not seeing the product up-close-and-personal. So make it as easy as possible for your clients by having pictures from every [...]
E-commerce boom in South Africa predicted for 2013
SOUTH Africa will see a boom in e-commerce next year, according to Simon Leps, CEO of digital solutions provider Fontera Digital Works. “We are at a very exciting time for e-commerce in South Africa. A lot of the big brands have started to take notice and have realised they could be left behind. Locally, we have plans for about 10-15 e-commerce sites to be launched next year for our clients,” Mr Leps says. By global standards, the e-commerce platform in South Africa is small, but as the timidness of local shoppers fades, a growing number of time-poor and techno-savvy consumers are turning to the internet for retail therapy and bargain hunting. Research by World Wide Worx, commissioned by Google, indicates that online retail is becoming increasingly popular in South Africa, growing at a rate of 30% a year. Online shoppers continue to increase locally, with 58% of the country’s 8.5-million internet users shopping online, and with the industry consensus aiming for 40% growth this year the highest rate in almost a decade. E-commerce start-up Zando recently landed an investment in the “three-digit million-rand” band from the asset management division of the global investment powerhouse JPMorgan. Zando is an online fashion store that sells local and international brands. “Attracting such a reputable international investor to support our future growth shows commitment and confidence in our business. This investment will assist the business by supporting its vision and all of its operations,” Manuel Koser, joint MD and co-founder of Zando, says. In order to gain market share from competitors Foschini‚ Woolworths and Truworths, fashion retailer Mr Price in July launched its online store‚ which allows shoppers to have their purchases delivered to their street address‚ post office or store for R35. “An online selling capability will enable Mr Price to further strengthen relationships with our target customers‚ who are tech-savvy and require a convenient and secure way to get their fashion‚” Mr Price CEO Stuart Bird says. Mr Price Home and Mr Price Sport are expected to follow with online stores next year. Woolworths CEO Ian Moir says the group’s online store is going well. “We’re seeing significant growth, but from a small base. We’ve invested a lot in our digital strategy, we’ve replatformed the site; it has our entire catalogue on now.… We’ve invested in better solutions in terms of picking and packing from stores, the distribution to the customers — [...]
