SA’s distressed e-commerce merchants get R2.5m grant

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Performance-based marketing company OfferForge and its partners have made available a R2.5 million COVID-19 grant for SA’s distressed e-commerce merchants.

The grant comes after trade, industry and competition minister Ebrahim Patel 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.

However, 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.

This despite the sale of other products like ICT equipment being allowed during level four COVID-19 lockdown which is set to kick in on 1 May, as announced by president Cyril Ramaphosa.

This comes as government gradually eases the economy back into activity.

A new study from Juniper Research found global spending on digital commerce will fall by 14% in 2020 as lockdowns and reductions in consumer spend are felt. Spending will fall from $11.2 trillion in 2019 to $9.7 trillion, it says.

The new research, Digital Commerce Coronavirus Analysis: Impact Assessments & Market Forecasts 2020-2024, identified the digital ticketing area as particularly at risk, given the effect of widespread lockdowns on transport usage and events.

It found digital ticketing spend will drop by 59% in 2020 compared to 2019. Airline ticketing will struggle to recover fully over the next five years, as airlines face unprecedented cashflow challenges which are set to reshape the face of the industry, says Juniper Research.

In a statement, OfferForge says in the last 40 days the way South Africans buy has changed forever.

It notes the e-commerce industry was severely affected by the lockdown restrictions and in many instances will only be able to resume trading when the country reaches stage three of the lockdown regulations.

To assist e-commerce merchants, South African-based company OfferForge and its partners committed R2.5 million to an e-commerce grant fund.

According to the firm, the fund will assist South African e-commerce stores to accelerate their marketing and recover from the lingering economic effects of the lockdown.

It points out that approved applicants will receive up to R38 500 in marketing credits which will be used against the set-up and operation of their affiliate programme.

“The fund, initially opened to Shopify-powered stores, has been expanded. Web stores that don’t use Shopify may apply, and depending on the complexity of their integration, may be approved to participate,” says Jonathan Miller, managing director of OfferForge SA.

The company has waived platform costs for 12 months, and says the only marketing cost the store owner will pay is a transaction fee on sales generated by the ad network.

E-commerce sales are generated when the network displays advertising across over 28 000 participating Web sites, also known as “affiliates”, it explains, adding the affiliate Web sites earn a commission on every sale they refer.

According to OfferForge, approved merchants will receive deeply discounted set-up at R4 000 once-off; waived network and ad serving hosting fees for 12 months (R12 000 value); one set of IAB standard banners (R6 500 value); launch marketing to affiliate partners on e-mail and social media (R8 000); and paid advertising on targeted Web sites (R12 000 value).

For more details, click here.

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