Tag: purchase

By Banele Ginindza for IOL

The South African National Taxi Council (Santaco) has not been derailed from its aspirations in the aviation sector by the recent rebuff from Mango Airlines business rescue practitioners (BRPs) and is actually looking at its options after consultations with its constituency, officials confirmed yesterday.

The organisation said it had initiated plans to enter the sector from as early as 2011, but was derailed by the downturn in the global economy and had taken on the Mango initiative as part of a broader strategy.

“A number of issues compelled us to take a step back even then. At that time we had not even dreamt that Mango would be up for sale, so the sale of Mango had presented us with an opportunity to remodel our entry into the industry,” spokesperson Thabisho Molelekwa said yesterday.

He said the organisation was not ready yet to fully comment on the Mango rebuttal or what strategy it would adopt to gain a foothold.

Aviation experts said over the weekend that with Santaco’s liquidity, the R820 million price tag for Mango was over the top and that kind of muscle would enable a whole start up of an airline as the trend amongst operators was to lease aircraft instead of outright purchases.

“The aviation industry has changed a lot since the pandemic and there are no guarantees for new entrants,” Molelekwa said.

Molelekwa would not be drawn to comment if Santaco’s review of the BRPs decision included a legal challenge, saying the organisation still had to report to its constituency, which is taxi operators countrywide.

Sources close to Santaco said the organisation was still keen to get a foot into the aviation industry, but that some advice it had obtained pointed to various options that were being considered.

BRPs, led by Sipho Sono, informed Santaco that their bid for Mango was unsuccessful for the transport organisation with more money than dust.

“The BRP of Mango evaluated all expressions of interest received in relation to the proposed transaction in accordance with the evaluation criteria and principles set out in the Bid Process Letter. After careful consideration, we regret to inform you that Santaco Services was not selected as a shortlisted bidder and accordingly shall not progress to the second phase of evaluation for the Proposed Transaction. On behalf of Mango, we again wish to reiterate our appreciation of your interest in the Proposed Transaction and wish you the best with your future endeavours,” Sono has told Santaco.

Industry experts said Santaco was being rebuffed to save the South African Airways (SAA) blushes of facing competition from a well muscled organisation which would ultimately gain the upper hand with better organisation.

“There is going to be war, those taxi guys have the muscle to take on SAA which is why the Minister (Pravin Gordhan) is not going to allow opposition to get into the industry,” an industry player said.


By Mark Bergen and Jennifer Surane for Bloomberg / Fin24 

For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the US. That insight came thanks in part to a stockpile of Mastercard transactions that Google paid for.

But most of the two billion Mastercard holders aren’t aware of this behind-the-scenes tracking. That’s because the companies never told the public about the arrangement.

Google and Mastercard brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly.

The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant’s strategy to fortify its primary business against onslaughts from Amazon.com and others.

But the deal, which has not been previously reported, could raise broader privacy concerns about how much consumer data technology companies like Google quietly absorb.

“People don’t expect what they buy physically in a store to be linked to what they are buying online,” said Christine Bannan, counsel with the advocacy group Electronic Privacy Information Center (EPIC).

“There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.”

Google paid Mastercard millions of dollars for the data, according to two people who worked on the deal, and the companies discussed sharing a portion of the ad revenue, according to one of the people. The people asked not to be identified discussing private matters.

A spokesperson for Google said there was no revenue sharing agreement with its partners.

A Google spokesperson declined to comment on the partnership with Mastercard but addressed the ads tool. “Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the company said in a statement.

“We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.” The company said people can opt out of ad tracking using Google’s “Web and App Activity” online console.

Inside Google, multiple people raised objections that the service did not have a more obvious way for cardholders to opt out of the tracking, one of the people said.

Seth Eisen, a Mastercard spokesperson, also declined to comment specifically on Google. But he said Mastercard shares transaction trends with merchants and their service providers to help them measure “the effectiveness of their advertising campaigns.” The information, which includes sales volumes and average size of the purchase, is shared only with permission of the merchants, Eisen added. “No individual transaction or personal data is provided,” he said in a statement.

“We do not provide insights that track, serve up ads to, or even measure ad effectiveness relating to, individual consumers.”

Last year, when Google announced the service, called “Store Sales Measurement,” the company just said it had access to “approximately 70%” of US credit and debit cards through partners, without naming them.

More possible deals

That 70% could mean that the company has deals with other credit card companies, totalling 70% of the people who use credit and debit cards. Or it could mean that the company has deals with companies that include all card users, and 70% of those are logged into Google accounts like Gmail when they click on a Google search ad.

Google has approached other payment companies about the program, according to two people familiar with the conversations, but it is not clear if they finalised similar deals. The people asked to not be identified because they were not authorised to speak about the matter.

Google confirmed that the service only applies to people who are logged in to one of its accounts and have not opted out of ad tracking. Purchases made on Mastercard-branded cards accounted for around a quarter of US volumes last year, according to the Nilson Report, a financial research firm.

Through this test programme, Google can anonymously match these existing user profiles to purchases made in physical stores. The result is powerful: Google knows that people clicked on ads and can now tell advertisers that this activity led to actual store sales.

Google is testing the data service with a “small group” of advertisers in the US, according to a spokesperson. With it, marketers see aggregate sales figures and estimates of how many they can attribute to Google ads – but they don’t see a shoppers’ personal information, how much they spend or what exactly they buy.

The tests are only available for retailers, not the companies that make the items sold inside stores, the spokesperson said. The service only applies to its search and shopping ads, she said.

For Google, the Mastercard deal fits into a broad effort to net more retail spending. Advertisers spend lavishly on Google to glean valuable insight into the link between digital ads a website visit or an online purchase.

It’s harder to tell how ads influence offline behaviour. That’s a particular frustration for companies marketing items like apparel or home goods, which people will often research online but walk into actual stores to buy.

That gap created a demand for Google to find ways for its biggest customers to gauge offline sales, and then connect them to the promotions they run on Google.

“Google needs to tie that activity back to a click,” said Joseph McConellogue, head of online retail for the ad agency Reprise Digital. “Most advertisers are champing at the bit for this kind of integration.”

Initially, Google devised its own solution, a mobile payments service first called Google Wallet. Part of the original goal was to tie clicks on ads to purchases in physical stores, according to someone who worked on the product.

But adoption never took off, so Google began looking for allies. A spokesperson said its payments service was never used for ads measurement.

So Google added more …

Since 2014, Google has flagged for advertisers when someone who clicked an ad visits a physical store, using the Location History feature in Google Maps. Still, the advertiser didn’t know if the shopper made a purchase. So, Google added more. A tool, introduced the following year, let advertisers upload email addresses of customers they’ve collected into Google’s ad-buying system, which then encrypted them.

Additionally, Google layered on inputs from third-party data brokers, such as Experian and Acxiom, which draw in demographic and financial information for marketers.

But those tactics didn’t always translate to more ad spending. Retail outlets weren’t able to connect the emails easily to their ads. And the information they received from data brokers about sales was imprecise or too late.

Marketing executives didn’t adopt these location tools en masse, said Christina Malcolm, director at the digital ad agency iProspect. “It didn’t give them what they needed to go back to their bosses and tell them, ‘We’re hitting our numbers,’” she said.

Then Google brought in card data. In May 2017, the company introduced “Store Sales Measurement.” It had two components. The first lets companies with personal information on consumers, like encrypted email addresses, upload those into Google’s system and synchronise ad buys with offline sales. The second injects card data.

It works like this: a person searches for “red lipstick” on Google, clicks on an ad, surfs the web but doesn’t buy anything. Later, she walks into a store and buys red lipstick with her Mastercard.

The advertiser who ran the ad is fed a report from Google, listing the sale along with other transactions in a column that reads “Offline Revenue” – only if the web surfer is logged into a Google account online and made the purchase within 30 days of clicking the ad. The advertisers are given a bulk report with the percentage of shoppers who clicked or viewed an ad then made a relevant purchase.

Most powerful tool

It’s not an exact match, but it’s the most powerful tool Google, the world’s largest ad seller, has offered for shopping in the real world. Marketers once had a patchwork of consumer data in their hands to triangulate who saw their ads and who was prompted to spend. Now they had far more clarity.

Google’s ad chief, Sridhar Ramaswamy, introduced the product in a blog post, writing that advertisers using it would have “no time-consuming setup or costly integrations.” Missing from the blog post was the arrangement with Mastercard.

Early signs indicate that the deal has been a boon for Google. The new feature also plugs transaction data into advertiser systems as soon as they occur, fixing the lag that existed previously and letting Google slot in better-performing ads.

Malcolm said her agency has tested the card measurement tool with a major advertiser, which she declined to name. Beforehand, the company received $5.70 in revenue for every dollar spent on marketing in the ad campaign with Google, according to an iProspect analysis. With the new transaction feature, the return nearly doubled to $10.60.

“That’s really powerful,” Malcolm said. “And it was a really good way to invest more in Google, frankly.”

But some privacy critics derided the tool as opaque. EPIC submitted a complaint about the sales measuring tack to the US Federal Trade Commission last year. A report in August that Facebook Inc. was talking with banks about accessing information for consumer service products sparked similar criticism. For years, Facebook and Google have worked to link their massive troves of user behaviour with consumer financial data.

And financial companies have plotted ways to tap into the bounty of digital advertising. The Google tie-up isn’t Mastercard’s only stab at minting the data it collects from customers. The company has built out its data and analytics capabilities in recent years through its consulting arm, Mastercard Advisors, and gives advertisers and merchants the ability to forecast consumer behaviour based on cardholder data.

Ad buyers that work with Google insist that the company is careful to maintain the walls between transaction information and web behaviour, keeping any info flowing to retailers and marketers anonymous. “Google is really strict about that,” said Malcolm.

Before launching the product, Google developed a novel encryption method, according to Jules Polonetsky, head of the Future Privacy Forum, who was briefed by Google on the product. He explained that the system ensures that neither Google nor its payments partners have access to the data that each collect.

“They’re sharing data that has been so transformed that, if put in the public, no party could do anything with it,” Polonetsky said. “It doesn’t create a privacy risk.”

Future Privacy Forum, a non-profit, receives funding from 160 companies including Google.

Google’s ad business, which hit $95.4bn in 2017 sales, has maintained an astounding growth rate of about 20% a year. But investors have worried how long that can last. Many major advertisers are starting to funnel more spending to rival Amazon, the company that hosts far more, and more granular, data on online shopping.

In response, Google has continued to push deeper into offline measurements. The company, like Facebook and Twitter, has explored the use of “beacons,” Bluetooth devices that track when shoppers enter stores.

Some ad agencies have actively talked to Google about even more ways to better size up offline behaviours. They have discussed adding features into the ads system such as what time of day people buy items and how much they spend, said John Malysiak, who runs search marketing for the Omnicom agency OMD USA.

“We’re trying to go deeper with Google,” he said. “We’d like to understand more.” Google declined to comment on the discussions.

If you have $3,3 billion lying around, why not buy a start-up? That is exactly what Walmart is doing.

The retail giant is buying two-year-old e-commerce start-up Jet.com in an attempt to invigorate its online sales division. Walmart is dropping a lot of money on this deal, but it hopes to get a lot in return.

What are the deal’s details? Erika Morphy gives us the background:

Walmart is buying Jet.com, an e-commerce site for the tidy sum of $3,3-billion, $3-billion of which will be in cash, to augment its own online sales operations.

Jet.com’s customer base does not align with Walmart’s customers, which could be a point in the deal’s favour only a fifth of Jet.com buyers have purchased from Walmart.com in the most recent six-month period.

Millions of people have bought items from Jet.com, but it may not be a household name for everyone. So what do we know about the e-commerce site? Jason Del Rey fills in the blanks:

Jet sells more than 12-million products A little less than a third of its sales volume comes from items that Jet stores in its warehouses and sells directly to customers.

Jet has a discounting model, dubbed the Smart Cart, that rewards customers with greater discounts as they add more items to their order.

It also gives customers additional discounts if they forfeit the right to return an item, or [if they] pay with a debit card. Four million people have made a purchase on Jet since it launched.
But what is Walmart’s impetus for buying Jet? Turns out, this is part of a larger trend.

Nandita Bose has some insight into Walmart’s purchase:

The deal follows a five-year e-commerce acquisition spree in which Walmart has already bought 15 start-ups, seeking the talent and technology to make it a dominant player online and narrow the massive gap with market leader Amazon.

Walmart’s online division has underperformed against Amazon, posting its slowest growth in a year as it struggled to gain traction with consumers, especially millennials.

So if the Jet purchase helps Walmart catch up with Amazon, this deal could turn out well for both companies. But they aren’t the only ones happy with this deal. It promises to pay out nicely for at least one Pennsylvania family. Anita Balakrishnan has the details:

Walmart’s acquisition of Jet.com was potentially a flush exit for early employees and its familiar big-name investors but it was also a probably huge windfall for 10 people who – like Pennsylvania’s Eric Martin – won significant equity in the company.

Martin won 100 000 shares in Jet.com as part of a contest aimed to get users to refer the most family and friends to the site.

That means he’ll likely get some slice of Jet’s $3,3-billion price tag, along with a handful of other contest winners, who each got 10 000 shares.

By Rebecca Link for www.computerworld.com

Buying a franchise or an existing, proven business model is a good way to reduce risk in tough economic times, say experts participating in the upcoming #BuyaBusiness Expo.

“With unemployment nudging the 25% mark and food prices rocketing, thousands of South Africans are looking to starting their own businesses as a way to survive and thrive. However, securing financing and developing a sure-fire business model are not easy. Business development experts report that the single biggest reason for new businesses failing is a lack of business management expertise on the part of the entrepreneur. The new business owner may be an expert in their field – be it baking, engineering or software development, for example – but if he or she does not know how to market the business, sell the product and manage the business’s finances, their business is immediately at risk,” says Carol Weaving, MD of Thebe Reed Exhibitions.

Buying into a proven business model helps to reduce this risk, particularly if the investment comes with support and guidance, say participants in the #BuyaBusiness Expo, to be staged by Thebe Reed Exhibitions at the Ticketpro Dome in Northriding in September this year.

Before investing in a business, it is important to consider whether there will be a market for the product or service, they advise. And in tough economic times, it is crucial that the product or service is priced right. #BuyaBusiness exhibitor Zhauns Business Opportunities & Engineering has ensured a long list of success stories for its customers, who buy equipment from Zhauns to produce goods their markets want, at affordable prices.

Zhauns sells machines for making everything from toilet rolls and envelopes, to pencils, bricks and charcoal briquettes. Its customer success stories include Pabcods Trading in Limpopo, which produces over 5 600 toilet rolls a day to meet local demand; and Big Brand Marketing in Johannesburg, which now employs eight people to keep up with demand for their toilet paper.

Zhauns director Riad Ahmed says the company, with over 15 years’ experience in Africa, has identified a number of FMCG products ideal for entrepreneurs to sell into their local markets.
“A lot of it is based on common sense. There are products everyone uses and needs, and there are opportunities for entrepreneurs to challenge major manufacturers by producing these products for sale in their local communities.”

Toilet paper is a case in point. Ahmed notes that until a few years ago, there were only a handful of major manufacturers in South Africa. Now, entrepreneurs buying machines to make toilet paper are able to work out of small premises with only three or four staff members, reducing the overheads and transport costs involved in the making of toilet paper. This allows the entrepreneurs to produce toilet paper for their communities at a very competitive price.

While this increases their chances of success, it does not assure success, however. Ahmed notes: “We provide the tools, teach them to operate the equipment, and ensure they have a marketable product. We can even refer them to business management training courses. But at end of day it’s the jockey riding the horse, so the entrepreneur is responsible for the company’s success.”

Through many years of working closely with entrepreneurs, Zhauns has pinpointed funding and financial management as the biggest hurdles in the way of the new business’s success. “Securing financing is very difficult. And often we see new business owners failing to reinvest all the money they make in the first year or so. They look at cash flow and treat it all like profit, which is a mistake.”

At the #BuyaBusiness Expo, Zhauns will showcase business opportunities priced as low as R5 000, for machines for key cutting or juicing.

Debbie Martins, area development manager – sub-Saharan and Southern Africa at fast food franchise Subway, says times are tough for business owners and consumers alike.

“Fortunately, people always need to eat, so food businesses tend to survive better than companies in many other sectors when the economy is under pressure,” she says.

Subway has an international model that drives traffic to stores through ongoing special offers. “We are constantly aware of the need to offer a discounted item in store for those who are cash strapped. These offerings are normally through a ‘Sub of the day’ or ‘wow’ campaign which discounts subs drastically to increase feet and get customers through the front door. These same customers will come back and spend money on items at full price when they have extra income to spend. It’s vital to reward brand loyalty, and therefore we also offer a loyalty programme called the Sub Club card.”

Subway’s years of international experience in what works to keep customers streaming in benefits the franchise’s new franchisees, and reduces the challenges involved in launching a new fast food business. However, Martins warns: “Just because you’re buying into an established franchise doesn’t guarantee you a successful business. Success is up to the individual at the end of the day. If you’re not well suited to the brand, the business won’t succeed. You have to have an aptitude for the kind of business you are buying, and you must be willing to put in the long hours needed to make it succeed.” Subway, which will showcase opportunities for the resale of established stores at the # BuyaBusiness expo, conducts extensive aptitude and personality tests with potential franchisees, to ensure they are a good match for the brand, and so increase the franchisee’s chances of success.

Another business opportunity at the expo will be Sherpa Kids childcare and education franchises, with start-up costs of under R200 000, which includes the franchise, training and working capital for equipment.
Genevieve Allen, MD of Sherpa Kids, says global statistics show that parents are spending money on their kids and educational and entertainment markets are growing at a consistent rate despite ongoing financial instability.

“This is certainly the case in South Africa’s booming education and childcare franchise sectors. The continued success of franchises in this industry proves that even in these difficult times, parents consider their children’s needs as a priority and will cut back on other expenses to provide for them.”

Sherpa Kids will also sponsor a grand prize of a Sherpa Kids franchise, in partnership with #BuyaBusiness.

The #BuyaBusiness Expo and Small Business Expo will be staged at the Ticketpro Dome in Northriding Johannesburg from the 8th -10th September 2016.

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