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Govt relaxes ICT equipment sales as e-commerce cries foul

Read time 6min 20sec

During level four COVID-19 lockdown, the sale of personal ICT equipment, including computers, mobile telephones and other home office equipment, will be permitted.

The South African government says the updated regulations will also lift a ban on ICT services for all private and business customers.

However, trade and industry minister Ebrahim Patel has rebuffed calls from local online businesses asking for unfettered e-commerce activities during the lockdown.

This after South African logistics and e-commerce businesses wrote an open letter to Patel on Tuesday, 7 April, requesting home deliveries of non-essential goods to be allowed during the lockdown.

Nonetheless, Patel in a press briefing last week, reportedly said allowing e-commerce operators to deliver non-essentials would be seen to be “unfair competition” and may result in the spreading of the coronavirus.

Back to work

The Department of Trade, Industry and Competition says about 1.5 million more South Africans will from 1 May return to work as government begins to lift a fraction of COVID-19 lockdown regulations.

This comes as government gradually eases the economy back into activity, as announced last week by president Cyril Ramaphosa.

The regulations were introduced last month as government sought to counter the spread of COVID-19 in the country.

SA has 4 793 confirmed cases of COVID-19, with 90 deaths, as of Monday.

Patel presented the details contained in the Risk Adjusted Strategy, which is out for public comment and consultation.

During the briefing, the minister outlined the classification of industries as part of the risk-adjusted strategy on re-opening the economy.

When the lockdown came into effect on 27 March, several sectors and industries were deemed essential and continued to function.

These included all energy, water and sanitation, telecommunication infrastructure, health sector, food production, healthcare and hygiene products.

All critical public sectors were also classified as such. Most financial sectors and mining, construction, communication, media, call centres and parts of the public sector have also been working during lockdown.

Level four will also see all agriculture, hunting, forestry, fishing and related services, including the export of agricultural products, permitted to operate.

The unbanning of personal ICT equipment comes as worldwide PC shipments totalled 51.6 million units in the first quarter of 2020, a 12.3% decline from the first quarter of 2019, according to preliminary results from Gartner.

The market analyst firm says after three consecutive quarters of growth, the worldwide PC market experienced its sharpest decline since 2013 due to the COVID-19 outbreak.

From light to right

Commenting on the relaxation of the of personal ICT equipment, Chris Buchanan for Client Solutions Group at Dell Technologies SA, says the lockdown happened so fast that there was very little time for organisations to respond with a long-term strategy.

According to Buchanan, Dell termed the initial actions from companies as the “do it light” phase. “After lockdown, there will be more time and a little more consideration can be given to the overall ICT strategy. Dell are referring to this as the ‘do it right’ phase where organisations will adopt better security, software and support strategies for their remote workforce.”

He points out that during the lockdown, there was a global spike in demand for mobility-related solutions such as laptops, routers, wireless wide area network data contracts, etc.

“Almost all passenger flights from outside of South Africa were stopped and local road freight was a challenge as they could only move goods with permits.

“I believe that our post-pandemic world will not return to what it was. With this in mind, it’s worth investing some effort in the ‘do it right’ phase to make sure employees are as productive as they were when working from the office,” Buchanan notes.

Speaking to ITWeb via telephone this morning, Abdul Moosa, chief technology officer of CoCre8, a majority black-owned company, which last week become the exclusive distributor of Fujitsu products and product-related services in the South African and English-speaking African market, said the company welcomes the decision by government on the selling of personal ICT equipment.

He pointed out the company was sitting with a massive order book and the COVID-19 lockdown made it impossible to deliver orders to clients.

Moosa said the new regulations will result in more cargo coming into SA and CoCre8 will be able to get more business.

In a statement to ITWeb, Huawei Consumer Business Group says: "We welcome the sale of our consumer products such as smartphones and laptops.

“We have noticed a change in consumer behaviour due to the global COVID-19 pandemic. From buying just one device (a smartphone), consumers are also buying complementary devices, such as, a smartwatch and a wireless headset or routers. This is due to the fact the entire family is now connected to a home network and require a variety of products and tools to stay connected and efficient.”

Irrational approach

Ebrahim Patel, minister of trade, industry and competition.
Ebrahim Patel, minister of trade, industry and competition.

Speaking about the plight of the e-commerce operators, Dr Charley Lewis, independent telecoms analyst, says: “South Africa is the only country that I am aware of that is actively seeking to inhibit e-commence as a continued avenue for economic activity under lockdown.”

Lewis believes it is an approach that appears entirely irrational, one that can only serve to inflict further damage on economic activity already reeling under the impact of the lockdown.

“It is an approach that runs counter to global best practice, which has sought to encourage e-commerce as a means to keep people off the streets and out of the shops.

“Certainly Minister Patel’s justification that it would create ‘unfair competition’ is as laughable as it is flimsy.

“COVID-19, by its very nature, undermines fair competition, with entire swathes of the economy shuttered for the foreseeable future. It is unfair competition that I can buy a pizza from the local supermarket while the pizza restaurant down the street is filing for bankruptcy.

“It is unfair competition that I can buy a bottle of fizzy sugar water from my local supermarket while its stocks of wine can only be ogled at behind steel shutters. It is unfair competition that has Dis-Chem and Checkers laughing down the road to the bank while airlines and flower shops file for business rescue.

“Strangling e-commerce and forcing Netflorist and Takealot to become purveyors of groceries flies in the face of digital transformation and undermines South Africa’s embrace of the over-hyped so-called fourth industrial revolution.

“To attempt to block ICT-enabled changes on the grounds that they are anti-competitive, or largely accessible by elites, is retrograde, obstructionist and luddite at its core. It's like telcos trying to stop the Internet, countries trying to block OTTs, or metered taxis trying to ban Uber and Bolt. ICT fundamentally changes the basis and nature of competition. That may be unfair, but it’s a fact of life. Minister Patel needs to think again and support digital transformation rather than blocking it,” Lewis says.

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