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Pandemic, riots turn more businesses on to benefits of e-commerce

Home Business Management Finance & Investment Pandemic, riots turn more businesses on to benefits of e-commerce

ONE of the ways South African businesses are managing to weather the economic tornado that has been Covid-19 – and more recently, unprecedented civil unrest – is by aligning with consumers’ digital buying patterns.

That’s according to Craig Lubbe, the CEO of South African internet auction and online marketplace Bidorbuy, who said while physical retailers have continued to experience growth pressure because of Covid and unrest, those which have invested within digital distribution channels have benefitted from more than 60% e-commerce growth in South Africa in the past year.

“Many large players within the industry have outperformed this. Several well-known brands which maintain stores on bidorbuy also have proprietary ecommerce offerings. In this way, they can achieve additional exposure and reach customers beyond their traditional brand-loyal audiences,” Lubbe said.

“Some examples would be Samsung, Verimark, Loot and Readers Warehouse. The length of time they have listed with bidorbuy varies, but in some cases is over 10 years.”

To put ecommerce acceleration into context, in 2018 online stores sold R14-billion worth of goods in South Africa. In 2020, that figure shot to R30-billion.

Lubbe said that given the scale and severity of the looting in KwaZulu-Natal and Gauteng, it was almost inevitable that many businesses would be turning to online avenues.  “There are benefits to doing this, including the fact that sellers do not need to rent retail space and hire shop staff.

“Stock can be stored securely elsewhere, which mitigates risks and can lower insurance costs. Many sellers also choose to work from home, which means no commute – and more quality family time.”

Perhaps most importantly, an online presence can work for a seller “24/7, 365 days a year” and is accessible to buyers nationwide.

“Goods therefore are not just those within easy travelling distance of a physical store. This means that a seller can potentially reach an audience of millions, and removes geography as a limiting factor in the growth of their business.”

An additional advantage, he said, is that selling on a marketplace involves very little in the way of upfront costs. Marketplace sites also typically offer all the tools that sellers need – including payment options, shipping options and marketing – and many of the basic administration functions are automated.

“It is also important to remember that online marketplaces and traditional physical stores are not mutually exclusive. There is nothing to stop a seller running both alongside one another to maximise their potential revenue.”

The key to online commerce, just as it has been on traditional trade platforms, is to stand out from the competition. “The fundamentals still matter – excellent customer service always gets sellers noticed. In our experience, it’s perhaps the greatest single differentiator,” Lubbe said.

“In an online context, being available counts for a lot. Sellers that always respond promptly to potential buyers tend to do well. Shipping on time and offering value-adds like free shipping are also excellent ways for a seller to set themselves apart.

“Sellers also need a good eye for popular or on-trend items, and need to be financially astute enough to manage their margins so that they can offer great deals and achieve excellent exposure for their listings. High-quality images and accurate, detailed descriptions will help move stock.”

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