Tag: e-commerce

Makro slashing online order delivery times

By Hanno Labuschagne for MyBroadband

Makro says it will radically cut its delivery lead times for online orders in the coming weeks, thanks to integration with last-mile delivery platform WumDrop.

Makro parent company Massmart secured a 100% shareholding of WumDrop in 2021, after initially buying a 53% stake in November 2017.

That forms part of a multi-year e-commerce strategy that has seen the group scoop up several innovative companies to strengthen its capabilities in last-mile delivery.

Massmart regards ecommerce as a key pillar for its growth in South Africa in the coming years.

The retailer has now stated that WumDrop will provide Makro customers with an improved experience using its digital channels.

“Makro will be able to clip its 3-5 day delivery lead time promise to just 2 days, for deliveries within 30km from any store, as soon as the end of June,” it stated.

“In some cases, the waiting time from checkout to parcel drop could be as little as 3 hours.”

Massmart explained the shorter turnaround was possible due to WumDrop’s unique store-to-customer model.

WumDrop’s user interface connects drivers with customers, allowing interaction in real-time and helping to ensure that deliveries are completed accurately.

Simon Hartley, WumDrop founder and Massmart delivery services executive, said WumDrop’s proprietary technology allowed its drivers to take products directly from the store to the customer, eliminating the need for a warehouse.

Hartley also said it enabled drivers to easily navigate South Africa’s unique spatial environment, which can be a challenge for traditional couriers.

“As an end customer, you may never know you’re interacting with WumDrop directly, given its seamless and effective representation of the client business.”

Massmart said it would continue to roll out WumDrop across the country to serve more of its stores and other businesses.

Despite being bought by Massmart, WumDrop still offers its services to other customers, including banks and fast food outlets.

MyBroadband recently had hands-on experience with WumDrop while testing out delivery from one of Massmart’s other stores — Game.

The retailer recently launched a new website which it promised would offer a better customer experience.

We ordered on 16 May 2022 and were initially given an ETA of 23 May for delivery.

However, we were pleased to have our order delivered just two days after placing it, a similar turnaround time as leading e-commerce store Takealot.

During the process, we were sent a link to a WumDrop page explaining details and progress on our order.

That showed us that our delivery address had somehow been incorrectly captured.

Unfortunately, the link was only provided in an SMS that arrived after our order had already been delivered, which meant the courier had to call us to explain where he should drop off the package before we could take action.

Nevertheless, the enhanced tracking was a welcome change from the notoriously slow Game deliveries experienced in the past.

Digital innovation is faster than ever

By Given Majola for IOL

In an ongoing effort to encourage digital innovation by large enterprises, small and medium enterprises (SME’s), as well as to encourage innovation on a broader scale within South Africa, BCX has announced the launch of its first Digital Innovation Report 2022.

BCX chief executive Jonas Bogoshi said the reality of the Covid-19 pandemic was that everyone was trying to solve problems never experienced before.

“At first it was for survival and business continuity, and later for some, it led to considerations for the future. It is without a doubt that digital technologies and digital innovation will play a big part of that future,” Bogoshi said.

World markets have experienced rapid technological changes as a result of the Covid-19 pandemic in pursuit of economic revival. He said the pandemic presented South Africa and much of the developing world with increased challenges, which seemed insurmountable. It had, however, also provided opportunities that must be seized if people were to rebuild the economy and remain competitive within a technologically driven global market.

The recently launched report includes a body of knowledge that outlines current trends and the status of digital innovation in South Africa, at both a micro and macro level. It provides an in depth look at subjects such as global and local trends in innovation, technologies that are fuelling digital innovation, especially in retail.

Regarding the retail sector, the report suggested that digital innovation has had a massive impact on this sector. In 2019, South Africa’s online retail space (or e-commerce industry) was still in its infancy, accounting for only 1.4 percent of total retail spend. However, the onset of the Covid–19 pandemic brought about nationwide lockdowns and restrictions to the movement of consumers.

Retailers needed to reform their business models to attract customers without the enticements of shopping malls. It pushed the pace of change into hyperdrive. The pandemic served as a launchpad for digital innovation, with an increased uptake in e-commerce from online retail and click-and-collect to video streaming. South Africa saw a 50 to 70 percent growth in e-commerce last year.

Similar insights were presented on critical sectors of the economy, such as Banking, Healthcare, and Insurance, amongst others. There were ten case studies included in the report of local companies depicting their journey to success with digital innovation.

“We are at a critical period of our economy – most countries are still reeling from the fourth wave of Covid-19 and are focused on their future sustainability. The world’s larger economies are picking up speed based on substantial stimulus packages and an incredible pace of digital innovation. We are playing catch-up and must act if we are to compete, ” Bogoshi said.

According to the report, South Africa has, however, greatly increased its adoption of digital technologies over the past 18 months. Although digital innovation and transformation have been priorities for South African organisations for a number of years, the Covid-19 pandemic has escalated the importance of digital innovation to ‘survival level’. The report cites a study indicating 79 percent of organisations in South Africa had fast-tracked digital transformation programmes by the end of 2020.

The BCX report said a positive aspect of Covid-19 had been the impetus it created for digital innovation, which was never experienced before in modern history. From the way people worked and the way bought groceries, to the way they received healthcare and carried out their jobs, the necessity for less physical contact had opened a gateway for digital innovation from which they stood to benefit for decades to come.

Bogoshi said: “The BCX Digital Innovation report 2022 highlights the opportunities that our current circumstances present for large-scale transformation of South Africa through digital innovation. It should be an inclusive journey, ultimately leading to benefits for all, whilst limiting the negative impacts of rapid changes we will most likely continue to experience for years to come.”

Is Amazon planning to enter SA?

Amazon is shopping around for warehouse space in South Africa, leading to industry speculation that the company could be looking to enter the local e-commerce sector, according to a recent MyBroadband article.

Amazon did not respond to MyBroadband’s request for comment on the matter.

However, every year for the last 12 years, there have been rumours that Amazon is coming to South Africa based on incomplete information.

Where speculation was rife that Amazon was entering online retail in South Africa more than a decade ago, the company instead launched a local call centre to provide support for its products to customers worldwide.

In the event that Amazon did enter the local e-commerce space,  it is expected to go one of two ways according to MyBroadband: they could acquire a local player; or enter the market directly.

Many South African e-commerce players are hoping for a buy-out offer from Amazon, as competing against the global retail giant is seen as a losing battle.

Amazon offers seamless importing for South African shoppers by estimating taxes and import duties for items it can ship to the country.

It provides a guarantee on this cost estimate. If taxes end up lower, Amazon repays you the difference. If taxes are higher than estimated, Amazon eats the loss.

A recent example where Amazon bought out a local player is Souk.com, which was the largest e-commerce platform in the Arabic-speaking world.

Amazon Egypt is the company’s only African retail presence so far. Amazon.co.za currently redirects to the main Amazon.com website.

Big e-commerce trends to look out for in 2022

Given the dynamic nature of technology, it follows that new trends are forever emerging in the e-commerce space.

Today, people seek out platforms that not only offer ease-of-use and convenient payment options, but those that embrace the latest technologies to make the overall shopping experience more exciting.

In South Africa, there have been high levels of innovation and change in e-commerce in recent years, according to The Online Retail Industry in South Africa 2021 report.

Bigger companies are investing heavily in tech or acquiring startup online retailers as sales soar.

More than R30-billion in online sales was recorded in 2020, a study by World Wide Worx found last year. This was driven in the main by Covid-19 lockdowns that moved people away from traditional in-store purchasing.

However even with an easing of restrictions online buying remains high, and will continue to do so. Data by Statista market and consumer data projects 31.6-million South Africans could be converted to online shopping by 2024, according to Business Report.

This means the onus is now on e-tailers and online marketplaces to ensure their platforms are front and centre when it comes to meeting consumer demand in the digital space, as competition is intensifying at a rate of knots.

Anne-Marie Green, marketing manager of South African internet auction and online marketplace bidorbuy, has paid close attention to emerging trends abroad, as these will invariably reach South Africa in 2022.

“The scale of some more mature e-commerce markets means they are open to experimentation by integrating other tools like social selling and chatbots to further enhance the online shopping experience,” Green says.

“Despite recent growth, South Africa remains a relatively underdeveloped e-commerce market, but studying developments overseas can help us predict and shape the future here.”

One of the bigger developments is the emergence of more payment options.

This stems from the fact that consumers like to be presented with a choice.

“This extends beyond the products on sale to shipping and payment options that customers can select during checkout,” Green says.

“Payment options such as instalments; buy now, pay later; and interest-free credit make e-commerce more accessible, and remove barriers to purchasing bigger-ticket items. Diversified payment options also mean that the e-commerce experience is better aligned to the diverse budgets and spending habits of consumers, and help to create trust in the positioning of ecommerce brands as being there for buyers.”

Something else that is taking the sector by storm is augmented reality (AR).

It builds on the traditional retail idea of customers being able to examine, touch or try on an item before making a purchase.

“Technological innovations such as AR will help customers to visualise how a product will look on them or in their home, and be an important differentiator for the e-commerce companies that bring this technology to market first.

Green has also noted that environmental concerns are starting to play an increasing role in shopping habits, as consumers “dig deeper into companies’ green credentials”. That means that e-commerce platforms have to ensure every aspect of their value chain is authentically sustainable, especially when it comes to delivery and packaging.

Another change to look out for in 2022 is the introduction of voice search to e-commerce platforms.

“Consumers are increasingly comfortable with asking their devices for information, advice and recommendations, and this is likely to influence the products they see and buy online in 2022,” Green says.

Lastly, artificial intelligence (AI) and machine learning (ML) will play an even greater role than they have already.

“If you’ve noticed that the best e-commerce sites seem to know what you want to buy almost before you do, then you’ve already experienced an important trend,” Green says.

“The integration of AI and ML is allowing sites to predict the products that are most likely to appeal to a particular consumer. AI can assess datasets and is adept at detecting and mapping out patterns, trends and anomalies. Of course, AI is only as good as the data available to it, but the increasing volumes of online transactions mean that datasets are expanding all the time.”

In March, it will be exactly two years since South Africa recorded its first Covid-19 case, and with new variants predicted for some time to come, it goes without saying that e-commerce will be affected.

It is something Green has come to accept.

“The pandemic has already transformed the shopping habits of South Africans, and its future trajectory will directly impact on e-commerce sale volumes and values. Spikes and troughs in infection rates will likely be mirrored in real time or at a slight lag by similar patterns in e-commerce activity,” she says.

“But the move towards online shopping is likely to be a lasting trend, with reluctance to visit public places and mingle with crowds an ongoing factor in many people’s decision-making.”

Source: News24

In a changing world disrupted by Covid-19, small to medium enterprises (SMEs) in South Africa have the opportunity to embrace many solutions presented by digital technology, or risk missing out on the future of business.

Contactless pay points, access to data and other accessible tech innovations have made business easier to manage for many during pandemic-era trading. Small to medium enterprises specifically stand to gain from the advancements made by easier cashless payment methods at the point of sale.

The way in which consumers are interacting with money has changed since the onset of the pandemic. According to a Visa South Africa survey earlier this year, 48% of consumers indicated that they did not want to shop at a store that has payment methods that require contact, while 59% of people prefer to engage in contactless money transactions in general.

The COVID-19 pandemic has accelerated the need for small businesses to get onboard the digital train to stay relevant in a changing marketplace. But the options to do so are also becoming easier and more accessible for all types of SMEs. We explore some of those here.

Going online and cashless systems

When it comes to going digital, not all SMEs are the same or will have the same needs. Many still require on-site service, while others can go completely remote. For the most part, all SMEs within the category have to consider their digital presence, with two main things to consider.

“The first is putting your business online. That is an absolute must in today’s world,” says Karin Mathebula, Head of Product, Sales and Service Enablement at Relationship Banking at Absa.

“Even if you are still operating from your shop, to be online means that you reach a much bigger audience. The second is the utilisation of non-cash-based payments. As soon as you put your business online, there is the opportunity to enable customers to shop online. Even in your physical store context, it’s really important to offer your customers the cheapest, safest way to pay for the goods or service that they are procuring, and certainly digital payments are the way to go.”

Contactless payments

An SME that has not considered cashless payment options, will miss out on an opportunity. Allowing customers to shop and pay online has proved to be a preference for many consumers during lockdown.

“Going digital means that people can buy your product and pay for it online or use cashless options such as tapping a bank card, or Apple Pay on their phone on site. But more importantly, everybody can see your business and it expands your customer base,” says Mathebula.

Accepting non-cash-based payments also means that you don’t have the cost and risk of handling large amounts of cash on your premises.

Data

Digitisation is ultimately about businesses using digital tools to analyse, learn and predict how things will be done in the future. It is a means of gaining as much information about your customer as possible and converting that into useable data.

For example, online shopping enables online payments – that information is turned into data that helps us to track the payment and the goods from that moment. Another example is paying with a card or a phone at a pay point. While the goods are physically exchanged, the payment linked to the goods becomes data immediately. Large corporations such as Amazon or Spotify have become experts in connecting buyers or listeners with sellers or producers.

“What’s important for SMEs, is to see the opportunity of being part of this big world of data – data about customer activity and the payments that they make, generate the ability to learn what else a customer likes or is interested in, how they pay for things, and offers the opportunity for other businesses to connect into each other’s value chains.”

Overcoming hurdles – costs and digital literacy

There are naturally some hurdles to overcome in transitioning to digital, but solutions are becoming more widespread. For many small businesses, these hurdles include the cost of data, being able to maintain cashflow properly, as well as finding alternative distribution channels.

“Both of these have an impact on the ability to raise finance, which is the most commonly identified barrier to growth and success by SMEs. Fortunately, we are able to support SMEs with tools to improve their ability to easily manage cashflow and collect payments. These in turn enable us to proactively offer cashflow support,” says Mathebula.

Banks such as Absa provide credit or cashflow financing. SMEs can use the data from their own bank account to create a cashflow statement using tools linked to their account, such as Absa’s Cashflow Manager. This helps to generate the sort of financial data on the basis of which credit decisions are made. It provides basic accounting information, can generate quotes and issue receipts.

SmartPay is a point-of-sale application that allows digital onboarding so that the customer does not have to physically go anywhere. A small business can have digital solutions, such as Absa’s Mobile Pay, this software turns your mobile phone into a Point of Sale (POS) device which allows merchants the ability to accept contactless payments on their smartphone.

These tools are ultimately a smarter way of doing business, which lowers costs and enables small businesses to produce more and focus on sales. This will help SMEs grow their share of the pie rather than just increase the number of slices.

 

Massmart in talks to acquire OneCart

Source: IOL

Massmart has announced that it is in negotiations to acquire a controlling stake in OneCart. The company said the negotiations were at an advanced stage. It said the acquisition was in line with its strategic intent to accelerate growth in e-commerce.

The group hopes to conclude discussions in the coming weeks.

OneCart is a South African grocery delivery service that was founded in 2016.

Massmart Group chief executive officer, Mitch Slape said: “The proposed acquisition is consistent with Massmart’s strategy to invest in and accelerate eCommerce growth, particularly in the fast-growing on-demand delivery segment. A key objective going forward would be to invest in aggressively growing and fully supporting OneCart’s existing independent retailer marketplace model that enables consumers to order from multiple retailers via a single platform.”

In March, Massmart outlined the group’s immediate eCommerce priorities including to:

• Establish a unified group-wide eCommerce capability under the leadership of Sylvester John who has been seconded by Walmart to fulfil the role of Massmart Group eCommerce vice-president.

• Revamp the makro.co.za, game.co.za and builders.co.za online user interfaces, including key functionalities like search, to provide a more seamless and intuitive customer experience.

• Develop new transactional and value-adding mobile-first digital solutions that cater to different customer occasions, journeys, and segments, including participation as anchor retail tenant on the Vodapay Super App.

• Strengthen and expand order fulfilment capabilities such as on-demand and same-day order fulfilment, “ship to home” capability from Distribution Centres to supplement store fulfilment capacity, and improving the click-and-collect customer experience in stores.

Group vice-president for eCommerce Sylvester John said: “It’s clear that we have the brand recognition, geographical presence, merchandise assortment, procurement scale, and primary logistics capability to be an even more successful eCommerce player.

“In addition to better leveraging these assets, our immediate opportunity is to improve and expand our digital sales platforms and last-mile delivery capability. The successful acquisition of OneCart will go a long way toward achieving this.”

The company said that in 2020, online sales across Massmart increased by 58.6%, the number of unique eCommerce customers grew by 73% and click-and-collect orders increased by 69.5%. eCommerce contributed 1.8% of total sales, representing a significant increase over the previous year.

OneCart has achieved year-on-year growth of 400% since its inception.

Slape said: “Successful closure of the proposed OneCart transaction will contribute immeasurably to our centralised eCommerce capability that has specifically been established to concentrate scarce expertise, including Walmartpracticence, in a way that will accelerate the adoption of eCommerce best practise at Massmart.”

 

The Amazon slayer: open e-commerce

Source: Mint

The investing world is enthralled by a determined Beijing as it cuts China’s private sector down to size by relentless regulatory action. That’s good news for New Delhi: its more subtle manoeuvres in the same direction are going largely unnoticed.

Amazon.com Inc. and Walmart Inc.’s Flipkart, however, would surely have felt the rising temperatures. Even as they weigh draft e-commerce rules that seek to restrict online marketplaces — not just theirs, but also the planned super-app by India’s Tata Group — a new existential threat lurks around the corner: a state-sponsored open network for digital commerce.

In China, homegrown stores like Taobao, Tmall and JD.com have an unshakable dominance in online retail. But now, the only other billion-people-plus opportunity open to American capital is also slipping away from its grasp.

It’s unclear how exactly India’s open e-commerce network will work — or if it will work at all. The template, according to the press statement, is the country’s highly successful Unified Payments Interface, a public utility that allows any entity to process real-time payments over smartphones provided a set of common protocols is followed. The UPI network has in a short time eclipsed proprietary card-based payments.

Fashioning a similar open network for online commerce will be a lot trickier. It’s easy to make a set of rules where there’s a simple, single-point objective of satisfying the central bank that the same funds aren’t being spent twice. Commerce, by contrast, involves far fuzzier outcomes. Did the consumer get the product she paid for? Did it arrive in one piece? Was the article genuine or a counterfeit? Was the returns policy enforceable? Additionally, brands selling online have to worry about resellers’ creditworthiness and their ability to manage complicated distribution logistics in a country with poor physical infrastructure.

The ministry says that merchants will be able to save their data under the open network to build credit history and reach consumers, breaking silos imposed by platforms “to drive innovation and scale.” Several questions arise: Are Amazon and Walmart-Flipkart, which aren’t directing even 10% of India’s $800 billion annual retail sales between them, stifling innovation to a point where the harm exceeds their positive influence from aggregating demand? Should they, therefore, be mandated to operate their merchant-onboarding processes according to some preset rules, eroding much of their power to determine what goes on over platforms in which they have invested billions of dollars? Like everywhere else, the danger with dominant marketplaces in India is that they will copy the bestselling ideas of merchants and introduce them as private labels. But is this threat currently so large as to require a systematic downgrading of platforms?

Not allowed to own inventory, the two dominant foreign-owned marketplaces have solved many of the underlying problems of trust by using a handful of large sellers they can control. This practice, challenged by some traders’ groups as discriminatory, is now in the crosshairs of India’s competition regulator. So intense is the scrutiny that Amazon’s joint venture with Indian software tycoon Narayana Murthy has decided to fold up by the middle of next year. The seven-year-old JV owns Cloudtail, the largest seller on Amazon’s India website. As the news website Morning Context notes, Cloudtail helped relatively smaller manufacturers — such as a saree brand from Rajasthan — acquire national reach on Amazon, something they may not have achieved on their own. Consumers are getting more choice than before. Once large platform-aligned buyers like Cloudtail are chased out, Amazon’s customer satisfaction scores could be hard to sustain.

As India deliberately de-emphasises the platform model, even the conglomerate Tata Group, which is planning a marketplace extending from fashion and lifestyle to electronics, may be handicapped if it’s unable to sell a cup of Starbucks coffee on its website. That’s because Starbucks Corp.’s joint venture in India with Tata makes it a connected party, which can’t act as a seller on the super-app, according to draft e-commerce rules. Ditto for Walmart Inc.’s separate wholesale unit. As an affiliated entity of Flipkart, it may not be allowed to hawk a shirt on the retail website.

The winner may be someone pursuing a different business model for aggregating supplies. Mukesh Ambani, India’s richest man, controls both the largest chain of physical stores and the biggest telco. Ambani’s Reliance Industries Ltd. could carry its own inventory, using its $180 billion balance sheet to buy and stock third-party merchandise and sell it online or offline — or in a hybrid online-offline setup.

A deliberate assault on the economics of digital platforms will possibly rank among the most far-reaching separations of platforms and commerce seen anywhere in recent years — save China’s recent forced restructuring of Ant Group Co.‘s operations. America’s historic moves to segregate coal from railroads, commercial enterprises from banking, and television networks from programming took place in a very different era that ended with breaking up AT&T Inc.’s lock on communications in 1982. But the pendulum is swinging again. Lina Khan, chosen by President Joe Biden to chair the Federal Trade Commission, is a keen proponent of a more muscular approach to reining in tech platforms.

This shifting zeitgeist gives New Delhi the perfect cover to prepare its Amazon slayer, even though digital commerce in India is at present just a sideshow. Far bigger anticompetitive forces are at play in sectors ranging from telecoms and ports to airports.

But then, politicians like to invent challenges that don’t exist, rather than tackle those that do. An open digital commerce network is one such solution searching for a problem. Emasculating the economics of platforms will give a big advantage to retailers who are allowed to own inventory. It could turn out to be more efficient, but not necessarily more competitive.

 

Source: IOL

The Competition Commission is set to start its Online Intermediation Platforms Market Inquiry on Tuesday.

The commission said the inquiry would cover online markets that facilitate transactions between businesses and consumers (or so-called “B2C” platforms) for the sale of goods, services, and software.

According to the commission, online intermediation platforms include e-commerce marketplaces, online classified marketplaces, software application stores, and intermediated services such as accommodation, travel, transport, and food delivery. Examples of these include:

  • Takealot (including Superbalist)
  • Mr D
  • UberEats
  • Airbnb
  • TravelStart
  • Autotrader
  • Cars.co.za
  • Property24
  • Private Property
  • Google Play
  • Apple App Store

The aim is for the commission to get a greater understanding of the online markets operating in South Africa, and whether there are factors that may be hindering competition or undermining the public interest.

“This will ensure that these markets remain contestable and competitive, which is in the long-term best interests of South African consumers and businesses that depend on them,” the Commission, said.

It said said online markets have become an increasingly important channel for businesses to reach consumers, a trend that has accelerated under the Covid-19 pandemic and likely to continue.

“Online markets provide consumers with the convenience of comparing a wide range of options and then safely purchasing online. For businesses, the online markets offer a ready-made infrastructure to sell online and a means to reach an enormous number of consumers nationally and internationally,” it said.

The commission also stated that the shift to online commerce also meant that it was important for South African businesses to participate actively in these markets if they are to be part of the global and national economy.

“However, global experience is that a few platforms may start to dominate online commerce given the features of online markets and in some cases the conduct of the markets themselves. In those circumstances, businesses using the markets may be exploited or discriminated against, and consumers may not be presented with the optimal choices,” the commission added.

The commission said the inquiry would focus on three areas:

a) market features that may hinder competition amongst the online markets themselves,

b) market features that may give rise to the discriminatory or exploitative treatment of business users,

c) market features that may negatively impact the participation of SMEs, and firms owned and controlled by historically disadvantaged persons.

Last year, commissioner Tembinkosi Bonakele said the commission would investigate and create new regulations to prevent the abuse of dominance by big firms.

Takealot, which is part of Naspers’ South African internet properties, was pin-pointed as dominant in the South African digital market.

Naspers invested in Tencent investment and used it as a launchpad into the online industry with investments in big Internet players like Delivery Hero, Code Academy, Udemy, PayU, FlipCart, and Mail.ru.

Naspers’ South African Internet properties include Takealot, Autotrader, 24.com, OLX, Property24, and Careers24.

 

Source: MyBroadband

Online retail in South Africa more than doubled in just two years, thanks to the explosion in demand for home deliveries brought about by the Covid-19 pandemic.

This was one of the findings of Online Retail in South Africa 2021 – a study conducted by World Wide Worx with the support of Mastercard, Standard Bank and Platinum Seed.

The study revealed that the total growth for online retail in South Africa in 2020 came to 66%, bringing the total of online retail in South Africa to R30.2-billion.

“The most astonishing aspect of this total is that it is more than double the R14.1-billion reached in 2018, in just two years,” said World Wide Worx MD Arthur Goldstuck.

“It is also 50% higher than the total forecast for 2020 three years ago, when online retail in South Africa was expected to reach R20-billion by 2020.”

Comparing the online retail market to traditional retail puts the figure into context.

In 2018, the R14.1-billion in online retail represented 1.4% of total retail, estimated at the time at R1.07-trillion.

Online had outpaced traditional retail growth throughout the past 20 years, since it came off a low base, but traditional retail still grew every year until 2019.

In 2020, it slumped as a result of lockdown as well as economic stress.

According to preliminary data from Stats SA shows, at current prices, total retail fell by 4.2%, to R1.05-trillion at current prices.

The percentage of retail made up by online retail sales came to 2.8% – exactly double the percentage for 2018.

“While equivalent growth cannot be expected for 2021, it can be stated fairly confidently that it will exceed the 30% growth of 2019, when expansion was organic and a factor of the evolution of shopping habits and retail strategies,” said Goldstuck.

“Those factors remain in place, along with the massive boost given to both areas of evolution since the pandemic began.”

This means South Africa can expect to see total online retail sales of around R42-billion in 2021, taking the online percentage of total retail to around 4%.

The findings were not a surprise, Goldstuck said.

In November 2020, Mastercard released the findings of a survey of 1,000 South African consumers, which found that 68% of respondents were shopping more online since the onset of the pandemic.

The categories experiencing the highest growth, aside from data and airtime top-up, were clothing, at 56%, and groceries, at 54%.

68% of these consumers said they used the time during the pandemic as a positive learning experience.

The demand for online entertainment also surged, with 52% of respondents saying they have spent more money on virtual experiences than they did before the pandemic.

The majority had participated in video calls for work or leisure (88%), three quarters (75%) had watched TV or films through an online subscription service, and nearly half (47%) had taken part in a virtual cooking class.

“This trend appears to be here to stay as 71% of respondents say they will continue to shop online post-pandemic,” said Suzanne Morel, country manager at Mastercard, South Africa.

 

The acceleration of e-commerce as the global Covid-19 pandemic revolutionises buying trends is giving rise to exciting new developments in the financial technology industry.

According to research by the United Nations Conference on Trade and Development (UNCTAD), e-commerce’s share of global retail trade grew from 14% in 2019 to about 17% in 2020.

And the phenomenon shows no signs of slowing down.

“Businesses and consumers who were able to ‘go digital’ have helped mitigate the economic downturn caused by the pandemic,” says UNCTAD Acting Secretary-General Isabelle Durant

“But they have also sped up a digital transition that will have lasting impacts on our societies and daily lives … Developing countries should not only be consumers but also active players and thus producers of the digital economy.”

It is not surprising that ecommerce’s meteoric rise has birthed new financial products and technologies that are able to align with needs of merchants and consumers.

In March, the New York Times described startup fintech companies as “hot tickets” among investors, and with good reason. Any company A person with a beard

Description automatically generated with low confidence not investing in online banking and digital tools will be left behind as the economic landscape undergoes a complete overhaul.

The result is that some fintech companies have already begun to list on the New York Stock Exchange, and this is only the beginning.

Closer to home, FinTech magazine forecasts that the financial technology sector will be “critical to the recovery” of numerous countries in Africa in the wake of the pandemic.

Figures from early 2020 show that venture capital funding for African fintech startups had risen by 51%. It was reported that new fintechs raised almost $350-million (R4.9-billion) during the first quarter of 2020, with South Africa leading the way with $112m (R1.6bn) in investments.

Projects included virtual banking projects, consumer credit checks and finance apps.

Against this backdrop, it was a ‘no-brainer’ for South African internet auction and online marketplace bidorbuy to partner with local e-commerce payment solutions company Payflex.

Payflex allows shoppers to pay off their purchase over six weeks, interest free, which obviously is also to the benefit of merchants as it will attract more consumers to their platforms.

“Payflex allows buyers on the platform to get the benefit of getting the product they want right away, but the flexibility of paying that off over six weeks, is a huge advantage. There is no catch and there is no interest charged on the repayments,” says bidorbuy CEO Craig Lubbe.

While bidorbuy is yet to see which categories are most popular for payments with Payflex, Lubbe expects that it will enable shoppers to have access to products that would, in many instances, be slightly out of reach in terms of value.

The marketplace also recognises that there is an ongoing shift from more established methods of payment such as EFTs (electronic funds transfers), to credit card and other contactless payment options.

“We also expect to see further developments within the e-wallet payment space,” Lubbe says.

“Because payment options are evolving as the needs of consumers change, we truly believe that we should offer our shoppers as much choice as possible. Not only does this include the wide assortment of new and used goods for sale, but also that our shoppers can pay in the way that is most convenient to them. Not every option suits the needs of every customer and we’d like to be as accommodating as possible to all who transact on our platform.”

Payflex CEO Paul Behrmann believes the partnership with bidorbuy will be a “win-win” for buyers and sellers on the marketplace.

“Our innovative payment solution helps buyers on bidorbuy purchase what they want to today – and pay for it later at no additional cost. And for sellers on bidorbuy, it makes it easier to close a sale by making purchases more affordable to buyers,” he says.

“At Payflex our primary ambition is to introduce innovative debt-free payment solutions that make shopping more accessible and affordable to all. By adding bidorbuy as a Payflex store, we can now offer thousands of Payflex shoppers the opportunity to shop with Payflex at the best marketplace in South Africa. A big-win for Payflex shoppers – which is a big-win for us”.

As part of the launch campaign, Payflex and bidorbuy will be offering new bidorbuy Payflex customers a number of promotions when they use Payflex on bidorbuy.

The partnership is very much in keeping with the latest international trends

In the United Kingdom, buy now pay later (BNPL) is the fastest growing payment method, with a growth rate that is double that of bank transfers and more than triple that of digital wallets, according to finder.com.

Its research shows that 37% of British consumers have used a BNPL service, and more than half of (52%) of BNPL users are using these services more during the Covid-19 period.

Similar statistics are being reflected in the United States, where a recent study found that 42% of respondents had used a BNPL service before.

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My Office News Ⓒ 2017 - Designed by A Collective


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