As local online retailers continue to release their figures for the holiday shopping period, all are claiming substantial increases in sales despite economic uncertainty and a depreciating currency.
Industry analyst Arthur Goldstuck says research currently underway by consultancy group World Wide Worx shows that overall e-commerce revenue at least doubled in 2001.
"All indications are that it was a good season for those online retailers who got themselves properly organised, have a track record and who learned from their history," he says.
Kalahari.net, the former bookstore which has branched out into electronics, says its sales increased by 111% compared to the same period last year. DVD and electronics retailer TheShoppingMatrix.com (TSM) reports an increase of 173%, and M-Web Shopping, the mall run by SA`s largest dial-up provider, says its turnover increased by 46%.
Although the sites are tight-lipped on specific rand amounts, TSM says it met its fourth quarter target of R6 million in turnover while M-Web says the average order from its merchants was R696.
The companies put forward different theories as to the reasons for their success, but all share a common belief that traditional forward planning played a major role.
"We anticipated what the big sellers would be and we took a stock position which enabled us to fulfil orders," says TSM GM Ingrid von Stein. "We know that our customers want their products delivered the next day."
Kalahari.net says its focus on customer service paid off, as did building a large database of products which includes a range of over 60 000 book titles.
M-Web, which hosts a number of well-known real-world retailers, says it managed to drive traffic to its mall by prominently featuring it on the MWeb.co.za portal. Eddie van Rensburg, GM of the company`s business solutions division, also believes increased consumer confidence in doing business over the Internet and broader available ranges played a role.
Kalahari concurs. "Consumer confidence has been a big concern globally and although we are not out of the woods, this festive season bore testimony to the potential for e-commerce in SA," says GM Hein Pretorius.
However, Goldstuck says smaller players did not have as good a holiday season. According to his ongoing research, the number of online retail sites in SA doubled during 2001, but more than 30% of the sites which were online at the beginning of the year no longer exist.
A number of these, he says, were small companies that were sold unrealistic promises by software or service vendors. Some had no turnover whatsoever during the holiday season as consumers did not know the brands and never came across them while surfing for gifts.
However, Goldstuck believes revenue from e-commerce will continue to double year on year for at least the next three years before levelling out. He says there is a direct correlation between the number of South Africans online, their experience on the Internet and with e-commerce, and revenue for retailers. As the number of connected people grows, so will e-commerce.
According to World Wide Worx`s research, the fastest growing categories of online goods last year were wine, lingerie and CDs, or, as Goldstuck puts it, "wine, women and song".
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