Is SA at last ready for true ecommerce?

There are encouraging signs that the conditions in South Africa are at last getting ready for true ecommerce – the sale of goods and services online – to such an extent that owner-managed businesses and not just huge corporate retailers can start viable online shops. Consider the following:

• Last year, online retail sales surpassed the R1 billion mark for the first time, says internet researcher Arthur Goldstuck, who predicts that it will grow a further 20% this year despite the recession. It’s still a fraction of total retail sales, but is becoming increasingly difficult to sneeze at.
• The total number of internet users in South Africa grew a 12,5% last year to a total of 4,6 million people. The rate at which South Africans are ditching dial-up for ADSL or other broadband connections grew a whopping 50%, says Goldstuck.
• The arrival of Neotel’s Seacom submarine fibre-optic cable in June this year will increase South African broadband access a staggering 40 times, making internet access cheaper and internet shopping more comfortable.

But more telling than any of these statistics is the experience of Charles Meyer, the Centurion-based owner of www.pokerathome.co.za, a straight-forward ecommerce website that sells poker and bingo sets in South Africa.

Perhaps it is significant that Meyer was only 15 years old when the dot-com crash struck. Not having been in business at the time, he wasn’t allergic to the idea of starting an online shop after he and his brother were playing a game of black-jack last year and struggled to find an automatic card-shuffling machine online. He promptly identified a limited range of playing-card related products, bought five of each, set up a simple ecommerce website and eight months later, much to his surprise, he is doing R25 000 to R30 000 turnover a month.

Search engine optimisation makes a “huge difference – it works”, says Meyer. He finds that regularly adding new content to his site keeps it from falling in the search result rankings. Meyer’s biggest expense for Poker At Home is on Google Ad campaigns, through which he “buys” search terms, for example the words “poker sets”, from Google. When someone in South Africa types in that term, his website comes up as a paid-for link. If the internet searcher clicks on his ad, he pays between 60c and R1,10 to Google. He budgets for about 200 clicks per day.

But the ultimate success of ecommerce has little to do with the emergence of Google or the evolution of websites. As so many businesses learnt through the dotcom crash, it is the readiness of the online shopper that determines the viability of ecommerce business. Goldstuck says it takes roughly five years for a South African internet user to get comfortable enough with the internet to buy something online. Therefore, only a part of South Africa’s 4.6 million internet users are currently active online shoppers. But if the figures are accurate, many more will soon join what could become – dare we say it? – a dotcom boom.

Adapted from an article in BigNews for the Business Owner: