The new heroes of e-commerce aren’t e-tailers

The Web has entered a new, participatory and social phase. Some have dubbed it Web 2.0, others refer to the third wave of the Net, but one thing is clear – consumers are the producers of the Web, the not-so-silent partners of the e-commerce world. 

The early stages of the online retail mimicked offline mass media. Goods and information were offered, consumers took it up. Supply and demand were delineated and defined and the goal was clear – companies needed to become the customer’s preferred supplier.

Today, successful online portals aren’t portals at all – they are platforms, explains Johan Nel, country manager for Gumtree South Africa.

“There used to be a clear definition where consumers stayed on one side, and producers the other. It was a one-way, top-down approach to commerce. We supply, you buy. The paradigm has shifted dramatically. Companies are still disseminating products and information, but so are consumers. Your customers have turned into your competition.”

Perhaps the threat wasn’t clearly recognised in the beginning, says Nel.

“Your average consumer-seller isn’t churning out enough products to make a dent in the bottom-line, but collectively, this is a significant threat. People love alternatives, and they have more now than ever before. The status quo has changed.”

Nel believes that Gumtree demonstrates exactly that, drawing 8 million unique visitors to the site per month – making it the largest local site in South Africa by close to 4 million visits.

“It is easy to be dismissive of classifieds. Classifieds were placed in a box – seen as unimportant, catering to a small niche with low buying power, separate from ecommerce in general. The reality is that when Gumtree entered South Africa in 2005, it became the protagonist of a new economy.

“It mimicked exactly what its peers did around the world, which is drawing significant volumes of traffic, and subsequently, created a venue where hundreds of thousands of consumers crossed the digital divide and became producers. Today, virtually every nation in the world has a classified or online auction ranking among its top ten most visited sites. Businesses are taking notice.”

It’s worth noting that some of the largest disruptors in the digital space have been focused on enabling others to trade, rather than trading themselves. AirBNB and Uber don’t own properties or cars, but they let anyone who does conduct a roaring trade.

“Our customers are the strongest brand advocates we have,” says Nel. “They are extremely vocal when they are happy or unhappy with changes to the site, for example, in part because there is a fusion between customer behaviour and ownership. Because they are the ones uploading the content, and transacting with buyers, they have a stake in the game.

“They are joint owners. It’s not the dictatorial model of the bricks-and-mortar world. They are building the business.”

Nel says characteristics of the new Web include:

* Transparency – “Customers are attracted to openness – they don’t buy into spin. To succeed in today’s market place, we have to encourage price comparisons, options, equal opportunities.”

* Low or no barriers to entry – “It’s a double-edged sword to have no or low barriers to entry, because there will always be a group that feels this has implications for security. But low barriers to entry, essentially allowing everyone to participate, also means that participants are extremely protective over the space they occupy. Our community excels at policing at itself.”

* Customers are drivers – “Customers are in the drivers’ seat and will steer the company in the direction it needs to go. As their demands change, so do you – and if their experience is threatened, you have to act. We saw this clearly in our automotive vertical.

“The category became extremely popular, which led to a lot more duplications and a lot more leads for the automotive dealerships. We decided to monetize the category and introduce a lead and ad management system for professional sellers. Dealerships are happy to pay for a service because the results were more valuable. If you have to change your model to maintain the integrity of the experience, you have to be able to do so.”

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