According to Expert Hub, South Africa’s ecommerce market is worth R10 billion per year and the number of online shoppers is expected to have reached 24.79 million in 2021. Companies like Amazon, Takealot, Raru and BidorBuy take up a large amount of that market share. However, many business owners are using this method to start their own companies, whether to make extra money, or as a full time vocation. E-commerce is one of the fastest growing sectors in the country, and as the Covid-19 pandemic has shown for many businesses, without partial e-business solutions, staying afloat will be difficult.
On the 1st of May 2020, South Africa moved to level 4 lockdown, a relief for small e-business owners as it allowed for most e-businesses to trade again. Snatcher Online, an e-commerce company, claims on their website that they are, “an online based retailer that strives to provide our customers with the best online shopping experience along with excellent customer service.” This company uses Shopify and has made over $64,000 in Sales Revenue.
But what is E-commerce and E-business? And has it replaced Makro?
E-commerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet. Whereas e-business refers to all aspects of operating an online business, e-commerce refers specifically to the transaction of goods and services. In essence, it means doing the usual thing we do in physical shops, online.
So if everything is going online, does that mean that people will not be using shops and malls anymore? Well, kind of? The case of Massmart’s DionWired closing down could be read as a case of e-commerce platforms out-competing its physical counterparts. There is still a market for in-house shopping though, especially around festive season. It is estimated that around 76% of people prefer to go to a physical store for their Christmas needs. Sometimes, nothing compares to seeing and touching that product for yourself, and getting distracted by those other things you don’t need – right?
Amazon has been developing its own futuristic mesh of physical retail stores which are simultaneously e-commerce stores. It’s called AmazonGo, and it reportedly is going to remove checkouts all together – customers can pick out what they want and the store will automatically charge that to their Amazon account. This will come as a relief to those who like going out to do their shopping, but hate talking to people, so you get your e-commerce experience outside!
What if I’m a greedy capitalist?
In South Africa, if you are not Takealot or BidorBuy, and just a small business owner who wants to pivot online, there are two general options:
1. You can sell through an already established marketplace like Amazon, BidorBuy, and Takealot.
2. You can use a specialised e-commerce platform like Shopify, Magento, WiX or WooCommerce and run your store like a profile.
Both of these options have their pros and cons. For example selling on an established marketplace is convenient to start and maintain. Amazon, Takealot, etc, already have the entire infrastructure in place to sell your products – it’s literally a market, but online. The downside to this is that you will be competing with many other sellers with products that are similar to yours. Another benefit of selling on a market is that markets usually have good reach, and your marketing needs are minimised. They have been around for a while so there are is trust and returning customers. The downside of this is that when selling on the market, your customer may not remember YOUR brand or shop, they will remember that they bought it through ‘X’ market. It may give you less recognition than you might build on a personal platform, as well as the database of customers to market future products to.
Selling on an e-commerce platform is a little different, and comes with its own pros and cons. Having your own page or profile on an e-commerce platform solves most of the cons you have by selling on the market, but with none of the benefits. For example, you get that brand recognition from your customers if you have your own website or page, as they are literally browsing your online store, owned by you. You get to design your store, and the customer’s shopping experience is by your imagination. But, you have to put more work into marketing your store and getting clicks and traffic onto your site. So, you have to put a little bit more time and effort into getting your products and your store noticed.
Many industry veterans recommend trying your own mix of both – choosing one does not mean losing the other. So, whether or not you go solely with the market, or solely with an e-commerce platform, you will need to decide which market or platform to use. When deciding this, these are a few things to consider:
1. What is its impact? Is it a true and tried platform/market? What is your competitors profit margin?
2. Usefulness. Does it satisfy all criteria for your business needs?
3. Cost. How much are you paying for the service, and is it worth it?
In South Africa, Magento, Shopify, WiX and WooCommerce are leading on the personal platform front, and Takealot and Amazon on the public market front. Your budget would determine which options are best for you. Most of these platforms have apps that business owners can use to track and monitor their business on the go.
Whichever way you decide to go, e-commerce is the way of the future. The convenience of the internet lies in the palm of your hands. It’s time to make full use of it!