More South African consumers have gained confidence in online transactions, as a result of laws that the country has enacted.
So says Trevor Ndobela, MD of Quarphix Communications, who is of the view that SA has, over the years, gradually moved towards providing an enabling environment for e-commerce to take place.
“The recently passed Consumer Protection Act has provided increased security and peace of mind for consumers, which has allowed for more online trade to take place,” says Ndobela.
He also believes regulation such as the Electronic Communications and Transactions (ECT) Act of 2002 aims to facilitate e-commerce by creating legal certainty and promoting trust and confidence in the electronic landscape.
The latest MasterCard Worldwide survey on online shopping revealed that 51% of South Africans with Internet access are shopping online.
The survey determined that online retailers remain optimistic about revenue growth and this is further supported by the fact that even two years ago in 2009, e-commerce sites such as Kalahari.net saw their revenues increase between 20%-25% compared to the previous year, notes Ndobela.
However, he points out that as optimistic as these figures may seem, a large number of South Africans still do not have access to e-commerce trade.
“Out of a population of about 49 million people, only six million have access to the Internet - a reality that counteracts efforts to make e-commerce viable in our local economy.”
According to Ndobela, this poses a missed opportunity for a bigger market share for entrepreneurs who buy and sell in the virtual space.
“E-commerce cannot thrive without access to a computer and an affordable broadband network. With almost half of the South African population living below the poverty line and 24% of it unemployed, the price of new computers is beyond the reach of most people,” he says.
Ndobela also notes it is only when the man on the street has access to the virtual world that the potential and convenience of e-commerce will be understood and utilised on a broader scale.
“Lower LSM [living standard measure] consumers will need more guidance in understanding the dynamics of online transacting, security and how they are protected by South African law against unethical online businesses,” he stresses.
“Change management strategies need to be put in place to shift mindsets and change negative perceptions about buying products and services online.”
He urges entrepreneurs to instil a culture of online trading by encouraging their existing customers to experience the convenience of virtual shopping on their portals.
According to a Synovate online shopping survey in SA for 2010, for a fifth of the people that do shop online, the main advantages of doing so were mostly around convenience - 43% stating it was more convenient than offline shopping, and 33% stating they shop online because it is “always open”.
Further benefits of online shopping include not having to endure a busy shopping environment or having to deal with salespeople (mentioned by 23% and 22% of respondents respectively). Another plus, the survey discovered, is that one can browse many items at once (18%) and that it's easy to compare details (16%).
World Wide Worx recently released a study revealing that the online shopping amount in rand value in 2010 will come to R2 billion and that there is evidence that consumers are becoming more familiar and comfortable with the process and are therefore spending more online.
“This dramatic rise in online retail comes in the wake of an ongoing increase in the number of experienced Internet users in SA,” says World Wide Worx MD Arthur Goldstuck. There are about five million South Africans online.
“Last year, there were 3.6 million people who had been online for five years or more. By 2015, that figure will be 6.8 million - almost double the potential e-commerce market of today.”
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