News of Tanua Holdings` unbundling followed predictably soon in the wake of Africam`s financial woes and subsequent winnowing. After all, the Tanua concept was incubated within the Africam group, which at its high point was lauded as one of the few local e-commerce business models to have made in that toughest of tough markets, the United States.
Are e-tailers hunkering down making their businesses work, or are they involved in quiet firefighting on the financial frontlines?
Basheera Khan, journalist, ITWeb
And of course, shortly after that blow to the sector came another report that online retail players remained optimistic about the future of e-commerce in SA. An ITWeb news story reported that bluebean.com had facilitated more than R6.4 million in online sales over a three-month period, while Digital Mall also confirmed its confidence in the sector, signing up several new clients and launching new Web sites for said clients roughly every six weeks.
At the same time, apart from the liquidations, unbundlings and general malaise affecting some of the players, nothing much seems to be happening in the rest of the sector. Arguably, no news is good news, but the resounding silence from other established retailers in this space is disquieting.
It begs the question as to what the cause of this silence is... are e-tailers hunkering down making their businesses work, or are they involved in quiet firefighting on the financial frontlines?
After all, the events overseas, and ensuing paranoia in terms of anthrax scares and increasing mistrust of the postal service have all had their impact on the IT sector, and SA is certainly one of the walking wounded in this regard.
Brave face?
The Pollyanna in me can still see the silver lining to this thunderhead. It`s clear that the major retail groups in the local market realise the importance of an online presence and channel, and that online shopping locally appears to display a perennial hardiness that e-tail sectors in other countries may envy.
Nevertheless, there is a disturbance in the force. A recent PricewaterhouseCoopers report bodes ill for the European Internet sector, finding that "up to 30% of dot-coms there are at risk of running out of cash and potentially facing consolidation unless a significant turnaround in trading conditions occurs".
Whether local e-tailers are merely putting a brave face on things, or if they have indeed found sustainable business models for the South African market, will be seen within the next six months, I believe. There is a segment of diehard consumers who are committed to the online experience. Those e-tailers that can find the business models to maintain this interest are the ones who will make it through these sour times. I`m holding thumbs for them all.
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