Source: IOL

Research by digitally-led marketing agency, Rogerwilco, indicates that only 25 percent of South Africa’s most popular websites have pop-ups that explicitly ask visitors for consent to collect data about their browsing activity.

With the Protection of Personal Information Act (Popia) coming into effect as of 1 July, these company websites are at risk of facing fines of up to R10 million for each breach.

At the same time, their executives could be jailed for 10 years.

While 90% of the sites do have a cookie policy, this is often hidden away, either in a notice in the website’s footer or buried elsewhere. The company websites investigated that don’t have an automated pop-up include Unisa, Takealot, World Sports Betting, Price Check, Vodacom, Private Property, Autotrader, Computicket, Zando, Clicks, Mweb, Fly Safair, Pick n Pay, Tsogo Sun Hotels, Department of Employment and Labour and SA Revenue Service, amongst others.

According to Rogerwilco chief executive, Charlie Stewart, “Popi requires that organisations take reasonably practicable steps to ensure that consumers know which of their personal information is being collected and for what purpose.”

While there is confusion as to whether or not South African websites need to ask visitors for their content to track them, Popi is largely based on the EU’s GDPR privacy bill, which requires people to ‘opt-in’ if tracking is applied.

“The penalties for non-compliance with Popi are significant, but fortunately, a 12-month grace period will apply during which organisations can get their house in order,” said Stewart.

He said, “The most shocking outcome from this research is that two years on from Cambridge Analytica, a scandal that changed the world, brands continue to play fast and loose with consumers’ data.

The debate must move beyond paying lip service to the legal compliance requirements and into a space where companies recognise that they need to restore consumer trust. Policies are not there to make the life of the marketers harder, but the experience of the customers better.”

What are cookies?

Cookies are text files that are stored on your device each time you visit a website. They store information about your activity which companies use to improve your interactions with websites. For example, if you log onto a website that uses cookies and you revisit it later, the cookies ensure that the website ‘remembers’ your information such as login and password, format settings, and website sections/pages/items viewed. This data is also sold to advertisers, which is why ads relating to a product that you previously searched for appear on other sites you visit.

By Prinesha Naidoo and Monique Vanek for Bloomberg

South Africa’s economy probably contracted more than 30% in the second quarter when restrictions to curb the spread of the coronavirus shuttered almost all activity for five weeks, according to central bank forecasts.

The annualised drop in gross domestic product is forecast at 32.6% for the three months through June from the previous quarter, the Pretoria-based Reserve Bank said in an emailed response to a query. That would be the deepest quarterly decline since at least 1990. The central bank’s projection in its annual report that was released on June 29 shows the economy will expand on a quarterly basis in the three months through September, which means the technical recession will be over.

The economy contracted an annualised 2% in the three months through March, the first time since 2009 that a South African recession has lasted longer than two quarters. The slump was less than projected and economists including Kevin Lings of Stanlib Asset Management warned that the fall-off in the second quarter will be severe.

South Africa implemented a strict lockdown from March 27 to limit the spread of the pandemic. For five weeks, almost all activity except essential services was halted and most citizens were only allowed to leave their homes to buy food, seek medical care and collect welfare grants.

The restrictions were eased from May 1, allowing the phased reopening of some businesses and industries. Still, many companies have closed down permanently and some of those that have resumed operations are still limited as to which services they may offer.

The Reserve Bank sees the economy contracting by 7% this year and the National Treasury projects a 7.2% decline in output. That would be the most since the Great Depression, when GDP fell by 6.2% in 1931. The near-term economic outlook is highly dependent on the development of the coronavirus pandemic and the extent of restrictions on business activity to limit the spread, the central bank said in an annual report.

Whatsapp Stokvels are back

By Bombi Mavundza for Business Insider SA

Despite the name change, the ‘stokvel’ still has the same modus operandi. Members deposit R200 – and hope to make huge profits.

The National Stokvel Association of SA (Nasasa) has previously warned South Africans that WhatsApp stokvels are most likely to be pyramid schemes rather than genuine savings vehicles – and those who have joined them have probably been scammed.

Like most pyramid schemes, the first few to join received a pay-out, but those who followed often lost all their money.

Many victims who have joined such stokvels in the past have seen group administrators disappear after making payments into the stokvels.

According to Nasasa founder and chairperson of Nasasa, Andrew Lukhele, scammers were using the popularity of stokvels to create pyramid schemes and take advantage of people.

Traditional stokvels are based on trust where everyone in the stokvel knows each other, and the terms of payout have already been set.

The Whatsapp scams often involves anonymous people, so it is impossible to track or trace the money when it disappears.

A stokvel, derived from “stock fair”, is a savings scheme where a group of people come together to save or increasing invest together.

Big growth for Takealot and Mr D Food

By Jamie McKane for MyBroadband

Naspers has released its financial results for the year ended 31 March 2020, showing impressive revenue growth for Takealot and Mr D Food.

“Takealot, South Africa’s number 1 etailer, extended its leadership and grew Gross Merchandise Volume (GMV) 46% year on year in local currency,” Naspers said.

“Takealot’s trading loss reduced by 20% in local currency and would have improved more, but for investment in the promising food delivery business.”

Naspers said this growth was driven partly by improving gross margins and disciplined management of operating costs.

Takealot recorded revenue growth of 28% in local currency, one of the main drivers of which was the marketplace business, which grew GMV by 77% year-over-year.

“Mr D Food, South Africa’s leading food-delivery service, continues to scale as it expands the local market for food delivery,” Naspers said.

Naspers also noted that Takealot was allowed to sell and deliver only essential items in the first phase of the COVID-19 lockdown, and Mr D Food was unable to operate while takeaway restaurants were closed.

Surge in demand
The reopening of e-commerce under the national lockdown has resulted in a surge in demand for online shopping.

This, in turn, has led to Takealot and other online retailers being flooded with orders which has resulted in significant shipping delays for many products.

A source close to Takealot told MyBroadband the company is now generating close to R1 billion in sales per month – around double their usual volumes.

Takealot did not confirm these numbers when it was asked for comment, but other e-commerce players also told MyBroadband their sales have more than doubled in recent weeks.

Many other online shops have increased their expected delivery times by over a week to address logistics bottlenecks.

South Africa is experiencing an unprecedented e-commerce boom, with transaction rates peaking at higher levels than Black Friday.

After many weeks of crippling retail restrictions which formed part of the national COVID-19 lockdown in March and April, unlimited ecommerce was allowed from 15 May.

The new regulations allowed all goods to be sold through ecommerce platforms, except for alcohol and tobacco products.

South Africans flocked to online shopping sites to buy products which were not allowed to be sold during the level 5 lockdown.

Many online shopping sites saw record sales on products like gaming consoles, laptops, vacuum cleaners, treadmills and home gym equipment, and media players.

A source close to Takealot told MyBroadband the company is now generating close to R1 billion in sales per month – around double their usual volumes.

Takealot did not confirm these numbers when it was asked for comment, but other ecommerce players also told MyBroadband their sales have more than doubled in recent weeks.

Online shopping volumes have increased so rapidly that many online retailers are struggling to cope with demand.

Takealot’s distribution centres, for example, have been overwhelmed because of the increased demand. This, in turn, has resulted in deliveries being delayed.

Many other online shops have increased their expected delivery times by over a week to address logistics bottlenecks.

Big jump in payment processing – PayGate
The companies which have the best overview of online sales volumes are online payment platforms like PayGate and PayFast.

PayGate chief sales officer Brendon Williamson told MyBroadband they have seen a marked increase in transactions since unlimited ecommerce was allowed.

“On Saturday 30 May our transactions per minute increased by double our pre-lockdown average with liquor, food, and gaming being the biggest drivers,” said Williamson.

He added that they were experiencing transaction peaks four-times higher than that of Black Friday 2019.

He said lifting the restrictions on ecommerce resulted in many people using online stores to buy products they could not purchase during level 5 of the lockdown.

“We knew this would be the case and so we had always planned to scale our systems to meet the high volumes of transactions,” said Williamson.

“The reality was we had to boost capacity by 700% just to meet consumer needs in level 3.”

While the current boom in ecommerce sales is expected to subside, sales will still be higher than usual.

“While we will see some correction during June, we expect our monthly volumes for the rest of the year to settle at around 40% higher than last year,” said Williamson.

“We believe the simplicity and efficiencies of digital commerce will keep consumers coming back for more.”

Continued growth since April – PayFast
PayFast founder and MD Jonathan Smit told MyBroadband they have seen unprecedented week-on-week increases in the number of online payments made since the start of the COVID-19 lockdown.

“Following an initial dip at the beginning of April, the weekly trendline in total sales volumes shows incremental growth,” said Smit.

PayFast saw steady week-on-week growth throughout April, which continued into the first two weeks of May in anticipation of ecommerce opening up.

“Working off an already high baseline in the middle of May, total payment volumes grew by 20% in the first week after ecommerce restrictions were lifted and by another 17% the week thereafter,” said Smit.

PayFast transactions peaked in the final week of May, with another 7% growth compared to the previous week.

“The first two weeks of June have seen slight dips, which is in keeping with monthly online shopping trends that generally spike towards the end of the month when most people get paid,” he said.

Smit added that they have registered over 7,000 new merchant accounts over the lockdown period, surpassing any other high-volume period of registrations, such as the lead-up to Black Friday.

Unemployment in South Africa rose to 30.1% in the first quarter of 2020, according to Stats SA.

Since the beginning of the year, SA’s tech sector has seen a jobs bloodbath.

  • In January, telecommunications giant Telkom communicated it was retrenching as many as 3 000 employees
  • Retail giant Massmart closed down its electronics units – DionWired and Masscash – leaving 1 400 people without jobs
  • Systems integrator Dimension Data revealed that approximately 480 employees were to leave the business through a Section 189 process
  • Cell C announced it was to let go of as much as 40% of its semi-skilled labour force, as well as some senior managers and executives
  • SABC is also set to cut about 600 jobs

During the period, finance shed the most jobs (50 000), followed by community and social services (33 000), agriculture (21 000), transport (17 000), manufacturing (15 000), construction (7 000) and utilities (4 000).

SA to miss tax target by over R300bn

By Lameez Omarjee for Fin24

SA will miss its original tax revenue target by over R300-billion this year, said Finance Minister Tito Mboweni.

During the tabling of the special adjustment budget on Wednesday, the minister explained that the country is already behind its 2020/21 tax revenue target by R35.3 billion. As a result, government has revised down the tax revenue target from R1.43 trillion to R1.12 trillion.

National Treasury recorded a R63.3 billion revenue shortfall in the 2019/20 tax year.

“We expect to miss our tax target for this year by over R300 billion,” Mboweni said.

While Mboweni did not announce any tax hikes to make up the shortfall, he said that tax measures of R40 billion would be needed over the next four years. Tax proposals will be announced in the 2021 budget.

Furthermore Treasury will work to find spending adjustments of R230 billion over the next two years.

He also touted the idea of zero-based budgeting. “This means that we will try to reduce all expenditure that we thought we can no longer afford. After all, we are not as rich as we were ten years ago,” Mboweni said.

Analysts had expected the budget to reveal a significant shortfall as a result of the lockdown which restricted economic activity and by extension tax revenue collections.

To cushion the blows of the lockdown on consumers and businesses, government implemented a R500 billion stimulus package, which included R70 billion in tax relief measures. These entailed deferrals on some tax payments such as excise duties, carbon tax and employee taxes. Government also opted to postpone tax proposals for corporate tax hikes and SARS was directed to fast track VAT refunds. Donations to the Solidarity Fund, set up to support the vulnerable in society, were also declared tax deductible.

A ban on cigarette and alcohol sales also had negative implications for excise duty collections. Back in April SARS Commissioner Edward Kieswetter said these restrictions saw a loss of R1.5 billion in excise duties. The minister has also been outspoken about his opposition to the ban on these items.

Bernard Sacks, tax partner at Mazars, noted that certain sectors of the economy had still not been able to restart operations, while some others are operating to a limited extent.

“The difficulties faced by Minister Mboweni are now immeasurably greater. Ways must be found to fund the steep rise in healthcare spending… Social grant spending will show steep increases as the unemployment rate soars even higher,” Sacks said.

By Jackie Cameron for BizNews

Chinese stock market darling Tencent has been a significant force behind the Naspers share price. The Tencent holding was moved to Prosus, which became Europe’s biggest listed consumer internet firm when it floated on the Amsterdam stock exchange at a valuation of more than €100bn in September. Prosus is controlled by Naspers. Prosus recently cautioned that not all of its operations had coped well with Covid-19. Tencent, however, has benefited from an uptake in gaming as people have self-isolated in lockdowns. BizNews Premium partner the Wall Street Journal reported that Tencent Holdings’ first-quarter profit was fuelled by strong demand for mobile games as homebound Chinese consumers turned to online entertainment during the coronavirus pandemic. Tencent, the world’s biggest video game company by revenue, said its January-March net profit grew 6% to 28.9 billion yuan ($4.08bn) from the same period last year. Revenue rose 26% to 108.1 billion yuan. Both beat analyst estimates, according to FactSet.

Tencent experiences $305bn rebound

Tencent surged toward a record Tuesday after a $305bn rally since its 2018 low.

The stock rose as much as 5.1% Tuesday, putting Tencent on pace for its highest-ever close. Shares, poised to have their best month since January 2012, have surged nearly 50% from March’s bottom to send Tencent’s market value above HK$4.7trn ($606bn).

After doubling in 2017, shares were almost halved at one point the following year as gaming approvals dried up and a slowing economy in China cooled advertising demand. But gaming has been a strong point in 2020 for Tencent in the wake of Covid-19 lockdowns. Analysts’ average stock target has risen 13% the past six weeks while Chinese investors have been holding a record amount of the company’s equity, according to data compiled by Bloomberg.

By Londiwe Buthelezi for News24

Troubled clothing retailer Edcon says the reason it sent retrenchment notices to all its staff is because it has not received any binding offers from people interested in buying the company or any of its divisions.

The retail group’s executive of corporate affairs and communications Vannie Pillay said the company sent Section 189 retrenchment notices to 22 000 workers, meaning that jobs of everyone employed by the retailer are on the line – as the owner of Edgars and Jet has approximately 17 000 people employed on full-time basis and about 5 000 seasonal workers.

“We did send notices to all our staff as per the LRA [Labour Relations Act] because we have no binding offers that have been received at this stage. So, it’s the prudent thing to start consultations in terms of Section 189,” said Pillay.

Biggest retrenchment plan yet

Edcon’s move makes it be the biggest retrenchment plan yet that any local company has announced during the lockdown, blaming it on the coronavirus-induced restrictions. For instance, the national carrier, SAA which is also in business rescue said 4 708 jobs were affected when it started retrenchment consultations in March.

Edcon said before going into voluntary business rescue in April that the lockdown caused it to lose about R2-billion in sales and did not see any other way out of its woes. But in the business rescue plan that Edcon published on the 9th of June, its business rescue practitioner (BRPs) envisaged that employees would be transferred to potential buyers of Edcon businesses. At the time, the plan said only unavoidable retrenchments would take place if there are remaining employees who were not absorbed by the buyers after the accelerated sales.

The plan said there was no conclusion to be drawn that people working in “non-viable” stores would “definitely” be retrenched. The BRPs were supposed to get final offers from businesses and parties interested in buying Edcon’s divisions by the end of June and finalise successful bids by early July 2020.

Therefore, it was expected that the extent to which the company would be able to retain jobs would become clearer then. But the business rescue plan did budget R597-million for proposed retrenchments of employees whose jobs the BRPs might not be able to save.

Online stores suffer major delivery delays

Online retailers in South Africa are struggling to deal with the onslaught of orders during the country’s coronavirus lockdown.

  • Takealot is suffering delays of between two weeks and a month. One MyBroadband user sent the publication a screenshot of an order that had been placed on 26 May but was due to be delivered by 30 June. Consumers have also complained of an inability to get hold of customer service agents in order to schedule returns and get refunds
  • Yuppiechef customers have complained of slow delivery and of changing stock. One reader complained of her order being changed to “out of stock” three times
  • Makro consumers have been complaining of delayed deliveries, incorrect orders and a lack of access to anyone in customer care to deal with returns or refunds
  • Online grocery app Zulzi has also been plagued with complaints of incorrect deliveries, lack of customer service and outstanding refunds

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