New research into e-commerce trends in SA shows business is booming, and there is a lot of room left for growth.
Jump Internet Technologies MD Albert Bredenhann says major retail players with large physical infrastructures are not yet online, while the majority of online traders are not yet investing in actual branches.
"There is a lot of opportunity for cross-movement, where you get the best of both worlds."
According to Bredenhann, there are about 1 000 online stores in SA, of which he located about 750. These were sent surveys and 25% responded with answers.
The results indicate that 67% of online stores are only employing between one and three employees.
"These are one-man-bands," says Bredenhann. "You get better service from them because it is personalised, but there are risks involved, because they could be gone tomorrow."
However, he says there is a lot more growth in online sales that can be unleashed.
"Checkout procedures are too complicated in SA, with nearly 27% of retailers asking for customers` ID numbers and 25% asking for their date of birth," he explains. "These are not relevant to the checkout and if you simplify the process, you can probably expect to see about 25% more in sales. No one is going to give away their ID number online."
The survey indicates 51% of online stores in SA are less than two years old. Of the retailers surveyed, 41% said they saw significant increases in sales over the last year, while 28% said they saw a slight increase in sales.
Areas that Bredenhann believes could be improved upon relate to, among others, online advertising.
"Offering advertising on one`s own e-commerce Web site is not very popular, with 66% of respondents not offering any advertising on their Web site. This is definitely a future growth area - advertisers should be doing brand-related advertising on product-related Web sites.`
However, he believes online advertising on the whole is still too expensive in SA.
"Online advertising costs between R50 cpm [cost per thousand views] and R250 cpm, so you pay up to R250 to have your banner appear one-thousand times."
The impact of this is seen in the fact that 41% of the survey respondents spend R1 000 or less on online advertising per month and 38% spend between R1 000 and R5 000.
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