Welcome back to another edition of DID YOU KNOW? – where we breakdown everything business and finance simply for SMEs to understand. This week we are taking a look at the transportation and freight industry of South Africa which small business owners can leverage for economic growth; so sit back and enjoy this in-depth miniseries which highlights the online shopping sector and how the different service providers work together to bring their products and services to every South African.
Transportation and freight without online and retail stores to sell a product are like ice-cream without the milk to make it. The sector employs one million people directly and indirectly in multiple areas of the industry so we will focus on the online section of this industry as it has more data available to showcase how big its contribution is to the South African economy every year.
For additional information click here to view the whole PDF document: http://tgh.co.za/wp-content/uploads/2017/10/wwf_transport_employment_brief_online.pdf
- E-Commerce’s Platforms
- Large and Small Couriers Company
- Warehousing, Air, Sea, Railway and Road Freight
Introduction
It can be said that the transportation and freight industry in South Africa is one of the top 10 driving forces of economic prosperity and with its multiple sub-disciplines it can be broken up into different industry categories, but we will focus on just three, for now, due in part to the information source for this chapter is mainly based on growing trends in the online digital space thanks to Covid.
South Africa is one of the most diverse countries in Africa making it multilingual, multiracial, and multifaceted. Adding different levels of thinking into the mix it is one of the most complex markets in Africa but that has not stopped online companies from trying to crack the secret to appealing to all South Africans. The rise of online shopping has become a way of life thanks in part to the Covid-19 pandemic
History
What is E-commerce? – Simply put it is the buying and selling of products or services via the internet. For many people e-commerce is something we participate in on a daily such as making online bill payments or purchasing from an online seller, e-commerce has different types of online shopping and platforms available.
The history of online shopping is closely connected with the rise and development of the internet in the late 1980s and with the launch of the first network-to-network system on 1 January 1983, the future of the internet was an uncharted jungle of endless possibilities. The architect of online shopping was British-born Michael Aldrich who was able to connect a modified domestic Television to a real-time multi-user transaction processing computer via a telephone line.
Book Stacks Unlimited an online bookstore created by Charles M Stack in 1992 was one of the earliest consumer shopping experiences. Stack’s store began as a dial-up bulletin board three years before Amazon was founded in 1994, they then moved to the internet as Books.com and was eventually acquired by Barnes & Noble the company that would be bested by the rise of Amazon.com
For additional information click here: https://www.miva.com/blog/the-history-of-ecommerce-how-did-it-all-begin/
E-commerce Insight in South Africa
A 2017 survey was conducted by Ecommerce Forum Africa, in partnership with IAB South Africa to highlight online shopping in South Africa. The outcome of this survey is being used to write this section of the chapter and shed light on the current development of online shopping as the next digital gold mine for South African’s, but also to show the advancement in technology providers who over the years have made it easy for individuals like you and me, to sell our products and services online to the ever-growing inter-connected South Africa.
Shopping is increasingly becoming the norm for online audiences in South Africa with findings from the survey revealing that 80% of shoppers have either maintained or increased their online shopping habits over the last twelve months and 46% of offline shoppers reportedly believing that they will make an online purchase in the coming years. The survey offers unique insight into consumer attitudes towards online and offline shopping and their respective purchasing processes. The results reveal online purchasing frequency, the most commonly purchased products, the main deterrent for online shopping, and specific motivators that could convince offline shoppers to trade physical shops for online stores.
Demographics
Age:
| 15-19 = 1% | 20-24 = 5% |
| 25-29 = 8% | 30-34 = 9% |
| 35-39 = 10% | 40-44 = 11% |
| 45-49 = 11% | 50-54 = 10% |
| 55-59 = 10% | 60+ = 25% |
Gender:
| Male | Female |
| 54% = 4 725.54 | 46% = 4025.46 |
Total = 8 751 Responders
Location:
| Western Cape = 23% | Eastern Cape = 7% |
| Free State = 3% | Gauteng = 43% |
| KwaZulu-Natal = 14% | Limpopo = 4% |
| Mpumalanga = 2% | North West = 2% |
| Northern Cape = 1% |
57% of online shopper respondents are male and 43% are above 60 years old and live in Gauteng.
Education:
| No School/Some Primary | 2% |
| Some High School | 20% |
| Matric | 44% |
| Technkon diploma/Artisan certificate | 21% |
| University degree | 12% |
Online shoppers are well educated – over 65% have completed education beyond matriculation.
Income:
| R 1 to R 2,999 = 5% | R 3,000 to R 5,999 = 7% |
| R 6,000 to R 11,999 = 7% | R 12,000 to R 19,999 = 13% |
| R 20,000 to R 29,999 = 12% | R 30,000 to R 49,999 = 15% |
| R 50,000 to R 69,999 = 9% | R 70,000+ =13% |
| Dependent/No Income = 5% | Prefer not to say = 13% |
Work Status:
| Student | Full Time | Part-Time | Retired | Not Working | Unemployed |
| 4% | 66% | 7% | 12% | 5% | 6% |
Online shoppers tend to be high-income earners who work full time, over 35% earn above R30 000.
Top Items Purchased:
| DVD’s, Videos + Music = 7% | Books = 10% |
| Event Tickets = 10% | Toys + Games = 4% |
| Software + Computing = 11% | Electronics + Accessories = 10% |
| Travel Purchases = 22% | Food + Drinks 5% |
| Health, Beauty + Gifts = 9% | Other = 8% |
The most popular items bought online don’t require delivery and are available almost instantly after purchase. These include travel tickets, books, shows/sporting event tickets, and hotel reservations.
Payment Preference:
| Credit Card = 45% | Debit Card = 21% |
| Bank Transfer = 20% | PayPal = 7% |
Over 65% of respondents that shop online prefer to pay with a credit or debit card.
Device Preference
- Desktop Computer/Laptop = 65%
- Mobile Phone = 27%
- Tablet = 9%
65% of online shopper respondents prefer to shop from a desktop computer or laptop.
Final Thoughts: It is clear from just this single survey that South Africans have become more comfortable with shopping online for the things they need, as well as the country is investing heavily into infrastructure that is convenient and affordable for the customer. In the wake of the Covid-19 pandemic, the number has accelerated higher than expected and that has created new opportunities for the supply chain to add levels of inclusion for small business owners to benefit from the boom.
South African & Global E-commerce Players
- com
- co.za
- com
- com
- com
- co.za
- co.za
- com
- com
Different E-commerce Platforms
WooCommerce
Pros
- Free to use – no purchase cost
- Easy to use and customise
- East to move your website to another host
- One of the best platforms for SEO
- Allows for extensions and integrations through plugins
- A large community of developers supporting the platform
Cons
- WooCommerce has only basic features and you need to install plugins or write code yourself for some desirable e-commerce functionality
- As there are many add-ons to choose from, security problems could arise if you’re not careful.
Squarespace
Pros
- Good support
- Easy to use and set-up with little to no coding skills
- Quick loading of website
- Perfect for small businesses
- Website hosting is included in their monthly fee
Cons
- To sell products you have to pay a cost of around $18
- Not very customisable
- Does not support third party payment providers
- Moving your website to another host is not ease
Shopify
Pros
- Arguably the quickest to launch
- Store web pages give fast response and loading times
- Relatively easy to set-up with little to no coding skills
- Supports online and offline retail points (POS)
- Website hosting is included in their monthly fee
Cons
- Add-ons are expensive and some require recurring billing
- Not easy to move to another hosting provider
- Custom theme development is expensive and requires an expansive skillset
- For additional features, you would need a professional developer
- Not the best platform for SEO
Magneto
Pros
- Features a rich and scalable platform
- Great speed and SEO
- Huge community support
- Great for Omni-channel retail
- Made to be integrated into popular accounting and CRM software
Cons
- Meant for big budget national and multinational E-Commerce owners
- Expensive to maintain
- Needs a developer for any customisation
- No direct support
PrestaShop
Pros
- An open-source which means you can download the software for FREE
- User-friendly interface E-commerce storefront is easy to maintain
- Crowdsourced support is easily available due to thousands of people using the platform
Cons
- Basic features are free but extensions can be expensive
- No direct support from the creators
Different Payment Gateway Players
- Payfast
- PayGate
- Mygate
- I-pay
- PayU
- Peach Payment
- SagePay (Netcash)
- PayPal
- Flutterwave
For additional information click here: http://www.marketingchannel.co.za/payment-gateways-south-africa-which-platform-is-best-for-your-ecommerce-store/
Different Types of E-commerce Business Models
- Business to Business (B2B)
- A B2B is a business that is selling to other businesses. This could be a physical product like raw building material, or a service like a corporate lawyer. It could also take the form of a digital product or service.
- Business to Consumer (B2C)
- As we are the consumer this is the model used by most of our favourite brands from fashion to furniture, gym membership to wine subscriptions. Most of the stuff we buy for both needs and wants is from a B2C brand.
- Consumer to Consumer (C2C)
- With consumer-to-consumer selling, there is no business involved at all and it’s usually a pretty casual set-up, think of a flea market or platform like Facebook Marketplace.
- Consumer to Business (C2B)
- This is where a consumer sells their services to a business, freelancers are the perfect example of a consumer to business.
Different Types of E-Commerce Websites
- Individuals Brand Website (One Seller)
- Online Retailers (A Select Number of Sellers)
- Multi-Vendor Marketplace (Multiple Sellers)
For additional information click here: https://www.websitebuilderexpert.com/building-online-stores/types-of-ecommerce-businesses/
That is a wrap for part 1 of our three-part miniseries diving into the transportation and freighting industry within South Africa and Africa. It was important to cover this topic as e-commerce is the catalytic driving force that makes up a major share of the industry so understanding what e-commerce is adds context to Part 2 and Part 3 and how small businesses are going to benefit from the long-term growth of this sector as well as shedding light on the supply chain that makes up the surface of the industry. Stay tuned for the next chapter of our amazing in-depth miniseries.
Yvette Pugin
Contributor
A force to be reckoned with: Qualified Senior Bookkeeper with 40 years experience in Administration, both in Corporate and the SME space. Having started working in the 1980’s when computers were still a dream; her experience was gained with manual systems. After working with SME Suppliers in the corporate environment, it became apparent that there is a need for not only education, but system management for SME’s.