When it comes to B2C commerce in this country, it appears that the smaller players are getting it right. Streetcar.com had very modest beginnings, as did Kalahari.net, DigitalMall and others. Less than favourable market conditions notwithstanding, these sites are enjoying steady growth, and with the exception of Kalahari.net, have done it all sans a big brother`s corporate backstop offering protection.
If this trend continues, will the bigger players snap up smaller, successful operations?
gAL.co.za, the student Web site mentioned in last week`s Net-Picking, was back in the news a few days later, announcing the launch of its online bookshop. The difference between it and say, Kalahari.net, is firstly that it has a very specific target in mind -- students and academia -- and secondly, that it has had enough time to learn the best way to approach an e-commerce offering.
Dynamic decision
It has an intimate knowledge of its target market and a clear understanding of its competitors. It has done its research, and partnered with among others, a supplier with an established distribution network and an equally deep understanding of the dynamics governing the marketplace.
Not the least of which, it has the chutzpah to take on a corporate-backed stalwart of the industry, and wonder of wonders, it actually offers products at discounted prices -- something e-commerce was meant to allow a long time ago, but which to my knowledge, has rarely emerged as part of a successful business model.
I find myself wondering, if this trend continues, will the bigger players snap up smaller, successful operations? Is there even room to conceive of a market consolidation like that which affected the ISP industry several years back?
In the end, I suppose the decision lies with the various strategists in whose hands rests the future of the online ventures in question. It comes down to how much they are willing to invest in what is still an unsure market, and how firmly they believe in the development of that market.
Ultimately, the two go hand in glove... investment in the market should make it a sure thing, and because it`s a sure thing, consumers will make enough use of the products/services/offerings to justify the initial investment.
Consistent inconsistency
That`s the theory in an ideal world, but I think the evolution of e-commerce has taught all players that the only consistent factor is the market`s inconsistency.
With a dozen or so ISPs servicing roughly the same market, it was inevitable that a handful of stronger players would emerge, and swallow the smaller ones. One wonders if, after about two years of learning the ropes, the stronger choices for King of the B2C World will consider duking it out for market domination.
MegaShopper, with its McCarthy Online backing, Inthebag, under the new parentage of Woolworths, M-Web`s Shopzone and even Pick 'n Pay`s online arm all have the corporate backing required to make marginally successful attempts at acquisitive growth.
The question is, how much room for expansion is there, before the operation loses focus, or brand value, and suffers damaging losses or goes belly-up altogether. Some might object to my less than optimistic outlook for the future, but if there are any lessons to be learned from the dot-com explosion, the danger of rapid expansion is one of the most critical.
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