Online shopping sites witness dramatic surge after govt unbanning
South Africa’s e-commerce sector reports a dramatic uptick in sales after government lifted the lockdown restrictions on online shopping.
Last week, president Cyril Ramaphosa announced government would pronounce certain changes to expand e-commerce trading under level four regulations.
This was followed by the Department of Trade, Industry and Competition lifting the ban on e-commerce, allowing the sale of all products except alcohol and tobacco.
There had been mounting pressure on government to allow unfettered e-commerce, after the introduction of restricted trading in line with the nationwide lockdown measures, aimed at helping contain the pandemic which has wreaked havoc on the trading sector.
While level five lockdown regulations limited e-commerce merchants to selling only essential goods such as hand sanitisers, masks, groceries and cleaning equipment, level four permitted the trading of ICT equipment such as laptops, mobile phones, winter clothing, bedding, some hardware, a longer list of personal toiletries, hot foods for delivery, products like stationery and educational resources.
Less than a week since government’s move to unban wide-scale online shopping, local e-tailers OneDayOnly, Bidorbuy, Equilibrio, Gumtree, AllSale Club and Raru told ITWeb they have witnessed a surge in online orders on their Web sites, with the rejuvenated activity expected to breathe life back into SA’s weakened economy.
Craig Lubbe, CEO of online auction and marketplace Bidorbuy, says although it has been only a few days, the shopping site has seen consistently strong performance, especially within consumer electronics categories such as cellphones and computers.
“If we look at the number of daily and weekly new registered users, we’ve gone from negative to positive double-digit growth – from the restricted trade period to open e-commerce regulation. The number of transactions on the platform has also followed a similar trend. We expect to see this accelerate as we move towards the end of the month.”
Almost immediately after the introduction of lockdown regulations, customers shifted their focus to digital products such as PlayStation and Google Play vouchers, digital mobile airtime and data products, which have seen good uptake, adds Lubbe.
“Another interesting observation was that while still in lockdown, we saw some of our collectables categories such as coins, notes and stamps show high levels of trade, even with delayed shipping arrangements.”
During level five lockdown, online shopping sites were reported to have taken a huge knock, with SA’s largest online shopping platform Takealot.com saying it was operating at 10% to 15% of normal trading rates.
Michelle Lehrer, co-founder and CEO of AllSale Club, says the subscription-based online department store has seen a massive increase in haircare products, toys and doll houses in the past few days.
“We have seen a 45% growth overall since the rules were relaxed. We feel the lockdown has propelled e-commerce in SA and it’s now time for it to shine.
“However, as South Africans make this leap, there is an onus on e-commerce companies, especially the smaller players, to deliver value and service and not let people down.”
Many non-essential products that customers had added on as basket items during the restrictions are now being purchased on AllSale Club, which has translated into a higher average spend per transaction, adds Lehrer.
Claire Cobbledick, GM of online classified advertisement and trading platform Gumtree, says there has been a consistent increase in activity on the platform since the move to level four lockdown, and then again after the lifting of e-commerce restrictions.
“With the opening of motor vehicle trade, we’ve seen a spike in replies as South Africans are scrambling to trade in, or trade up their vehicles. Plenty of cash-strapped South Africans are also selling their home goods online in anticipation of an easing of restrictions at level three.”
Although there remain restrictions on movements of peer-to-peer traders, many of Gumtree’s customers are operating wholly online or offering delivery via formal or informal courier services, notes Cobbledick.
OneDayOnly.co.za, which offers customers discounts of up to 80% off on items across various retailers, says exercise equipment, personal protective equipment and some higher value items such as beds have been in high demand over the last four days.
“Online sales have definitely gone up with customers knowing the items they are ordering will be delivered. We've seen evidence of this with excellent sales especially over the weekend,”notesLaurian Venter, director at OneDayOnly.co.za.
New comfort level
The COVID-19 virus has radically impacted the buying habits of South Africans, with more consumers reportedly doing more of their shopping online, catalysing future growth in e-commerce and positive attitudes towards it.
South African retailers Game, Pick n Pay, Makro and Shoprite told ITWeb they have in the past few weeks experienced a surge in online grocery orders, as consumers adapt their purchasing behaviour with lockdown regulations.
A research conducted by consulting firm Kantar found that 22% of surveyed local consumers say they are now using online shopping more frequently, and 42% of people under 35 years of age say they are shopping less at physical outlets in favour of e-commerce.
Equilibrio, an online store that focuses on locally designed and produced women’s fashion, footwear and accessories, says there has been an overall uptick in sales in the past few days.
“An interesting trend is that we are seeing many new customers that have never shopped with us before,” states Michelle Doyle, founder of Equilibrio.
“This could be a consequence of lockdown circumstances, where customers that would normally go to a mall, are now trying online shopping for the first time. As new customers come online and buy one item, they return a few days later to buy a few more. Perhaps this is because they now feel more comfortable with the online shopping experience.”
Neil Smith, director of Raru, told ITWeb: “We've seen quite a dramatic uptick in sales. It will take some time though for all the supply chains to become fully operational again, as a number of suppliers need to get their distribution centres up and running again to cater for online orders,especially for goods which have to come in from overseas due to limited flights to SA.”
Says Kim Reid, Takealot Group CEO and founder: "
We are thankful that the government has now acknowledged the role e-commerce can play in South Africa, creating jobs and fulfilling consumer needs.
"The immediate trend seems to be new buyers trying online shopping for the first time, specifically on mobile. Social distancing remains a key element to reduce infections and online shopping allows for safe and hygienic delivery of goods to customers’ doors.”
Next month, certain parts of the country, including Gauteng, are expected to move into level three lockdown, while other provinces remain in level four.