All indicators reflect that e-commerce in SA is still in its infancy compared to the rest of the world, said Dieter Febel, MD of leading ISP, SA Gateway, sister company to broad-based distributor, Esquire Technologies.
“Frankly, compared to the rest of the world, we are not even close. Research shows that there are a number of reasons for this. But hopefully, over the next few years, these stumbling blocks will be overcome,” said Febel.
Some of the stumbling blocks include the unfortunate fact that delivery charges are still too expensive, that consumers think they cannot shop without a credit card – and would rather visit a store than spend money on delivery.
Consumers are also still worried about security, specifically related to credit card fraud.
Febel also noted that consumers are also worried about the size and fit of clothing – and how they would go about returning items, if need be. Some think it would be difficult to return items.
“Another problem is that, where site content is thin, or lacking, consumers would rather go in-store to check out the products physically. To touch and feel. This is why it is important for e-commerce companies – and retailers – to develop sites with good content.”
But this is not the death knell for e-commerce in SA.
“Part of the problem is that, due to the fast growth of e-commerce, many of the sites out there are just not good enough. And this turns consumers off. These low budget sites usually make use of an off the shelf product, with an off the shelf theme. Indeed, very little thought is given to the customer experience, as companies try to cut costs as much as possible – yet they still expect sales to be good.
“If you are going to enter the e-commerce space it is imperative to give your site a lot of thought. It doesn’t have to cost an arm and a leg – but at least provide enough info, and make the site user friendly.
“While e-commerce might not have created fireworks for most retailers yet – with online retail sales only accounting for 3% of total sales – there are positive signs that it is a growing market, albeit from a low base.”
This is one of the reasons why two leading e-commerce companies, Takelot and Kalahari.com, recently merged. Both were still making losses and they are hoping that the increased critical mass will catapult them into better growth as a union.
“However, consumers are spending more every month. They are, increasingly, becoming more comfortable with e-commerce. While it has not exploded yet, it definitely will, given that South Africa inevitably follows the technology trends of the rest of the world. We just take a few years longer,” Febel quipped.