E-Commerce has grown at record rates during the Covid-19 pandemic with the United States recording non-store sales growth of around 40% by the end of 2020. Between July and September, last year consumers in the States spent just under $ 200 billion online. In South Africa, e-commerce only represented around 2% of retail spend in South Africa by the end of 2019.
Yet, according to a report published by Research and Markets, the pandemic saw 40% in online retail by September last year. Lockdown and the accelerated rollout of fibre and high-speed internet all worked in the orchestra to fuel an expected sustained level of double-digit growth.
Payment gateway and e-commerce provider Netcash has seen similar growth in online transacting, recording a 35% growth in volume with values catapulted into the stratosphere as some sectors saw spend increases of up triple digits, circa 600%. Retailers and brands have not let the grass grow under their feet. “We have seen a huge number of brands launching online platforms, from boutique small businesses to larger retail brands.
There have also been substantial upgrades and improvements to existing e-Commerce sites paired with an increase in digital marketing across the board. “South Africans have been given a bump in the right direction and the knock-on effect is exciting. Having had many interesting conversations with the local suppliers of international brands, their marketing budgets have been shifted and the brand strategy revised with much more focus on eCommerce,” says Steven Howard, product manager at Netcash.
The Research and Market report notes that trends suggest further growth but, that this is offset against lessened spend at physical stores. Due to the demand for rapid deployment of an online presence or, for that matter, redefining of digital strategy, there have been some bumps in the road as e-commerce made its giant leap forward last year. “We have seen some of our larger retailers launch eCommerce platforms piecemeal sans appropriate depth or investing in eCommerce experts to advise on the best technical solutions, user design and digital strategy.
Consequently, the initial online user experience for many has been somewhat unpleasant, leaving customers disappointed and disillusioned.” However, adds Howard, “conversely brands like Takealot, Superbalist, Woolworths and Mr. Price deliver a user-friendly interface, simple returns policy and fast customer service to resolve queries and answer questions.”
Retail and franchising specialist Manny Nichas agrees. “Beyond the product, user experience is the most critical aspect of any online retail venture. Whether it is food, beverages, groceries or clothing, the journey starts at the first click and ends with last-mile fulfilment, all fine-tuned.”
Niches transformed restaurant group Mozambik during lockdown by taking the business online, adding groceries to its offering too, yielding substantial results. “Innovation, reimagining products and services and finding your true place in the value chain is important. E-Commerce will continue to grow and surge business ahead in South Africa.”
“We have seen a substantial uptake in clothing, digital or downloadable goods, online education and of course food & beverage,” notes Howard. Concomitant to this, Nichas adds that as access to online platforms become easier and startup costs are pressured downward, more independent retailers will join the online fray. “As the value chain develops and opportunity cost stabilizes, I anticipate that owner-run or independent retailers and restaurants will diversify and build their own online presence.”
This is not to say that there will be a move away from marketplaces or collective food delivery services, but rather an opportunity for entrepreneurs to fill additional gaps and market and sell their products and services digitally, themselves.
“I believe we will see double-digit growth for the foreseeable future as more and more people gain access to the internet and trust develops with consumers,” adds Nichas. Equally as upbeat, Howard says that Netcash has invested in a platform, Netcash Shop, that will make selling online cheaper and easier for everyone.
“We want all South African’s to have an online presence and a fair chance at being part of the online boom by establishing their products or services online in the South African marketplace.”
About the author
Hein Kaiser is a seasoned journalist, broadcaster, producer, and marketing communication professional and has worked in a variety of markets, sectors, and countries. He presently hosts the 360 Brunch over weekends on Mix 93.8FM, writes for the Citizen and consults to various companies on a strategic level.