How online businesses can attract a broader customer base

While the reflected increase in internet connectivity is a very positive sign, just 10% percent of the population is connected to the internet

June 22, 2010

While the reflected increase in internet connectivity is a very positive sign, just 10% percent of the population is connected to the internet. By contrast, some reports show that up to 90% have cell phones. Of those, around 65% have browsing capability. One Cape Town CEO urges online businesses to integrate both platforms into their marketing and operational plans.

Internet usage and broadband trend reports issued by World Wide Worx and Cisco have shown a dramatic increase in connectivity and use patterns compared with last year. Research data released in January revealed that 10% of South Africans are connected to the internet. Broadband usage data in March showed that internet access from a broadband connection has increased by 50%, with wireless access growing nearly three times faster than fixed line access.

Many businesses are migrating their operations to the internet environment, using online technologies such as cloud computing, ecommerce functionality and payment gateways such as PayPal. There are many reasons for doing so. Companies can reduce costs, enhance operational flexibility and expand their customer base to broader markets.

This is undoubtedly good news, reflecting increased confidence in the internet as an ecommerce medium. The Seacom cable, more reliable, cheaper connections and reducing hardware costs are clear influencing factors. But what of the remaining population and particularly small businesses who are not yet connected as a result of cost or lack of knowledge? Many may be alienated from commercial opportunities and possibly denied the chance to expand their own small businesses as a result of their lack of access.

Jean-Pierre Dumont, CEO of full service ISP and web development consultants WebNow, is asking the same questions, saying: “The usage statistics show some fantastic growth from last year. But the connectivity gap may alienate a large proportion of potential customers.” Dumont expresses the view that with just 10% of the population actively connected, businesses should consider how to integrate other tools to connect with the remaining 90% and broaden their customer base on their own doorstep.

Mobile internet and SMS platforms are the answer. With such significant cell phone penetration and over 60% of that penetration allowing mobile browsing, it is becoming much easier to expand a business’s customer base, and also to allow smaller traders to compete in a wider market.

Dumont continues: “Clearly, South Africa’s socio-economic structure has a great impact on the connectivity gap which will in turn influence the size of a business’s economically active market. But the point is that there are technologies available that enable a two-prong approach to help online businesses interact directly with their customers without relying on a customer’s own connectivity.”

In one example, WebNow is currently developing a platform for a web-based business seeking to attract users who lie at both ends of the connectivity scale. The system’s end users lie within the connected demographic. But the vast majority of the business’s service providers do not have internet connections. As a result, a large proportion of the marketing and development budget is being allocated to two-way SMS functionality.

By integrating different platforms into the development architecture, it allows the internet to be used as a pull mechanism to help customers find service providers. At the same time, the system leverages South Africa’s widespread cell phone coverage to push service providers towards their customer base. By taking this approach, it will be possible to open up many more commercial opportunities for businesses working from grassroots level right up to well entrenched major corporates.”