Unlocking the SME e-commerce potential

Hardly any industry sector has been left unscathed by the e-commerce phenomenon. Rapid innovation and the disdain with which traditional barriers have been swept aside have levelled the playing field for even the smallest business.

Not only have industries been shaken up, but also business models and principles. Take, for example, the accepted knowledge that being first-to-market holds tremendous power over competitors.

This no longer applies only to brick and mortar stores, but online businesses are now equally at risk. Google, Amazon, and LinkedIn may still be ruling the roost in their respective sectors, but they are constantly dogged by new businesses operating in niche sectors that threaten to eat into their market share.

“This is as relevant to the South African economy as elsewhere, possibly even more so given the rate at which online shopping is growing,” says Greg Hatfield, General Manager for Marketing, Products & Solutions at MTN Business. “The reason for this is that this growing appetite is coming off a low base, which presents a huge opportunity for businesses able to enter the market now.

“The growing local propensity for shopping online is happening in tandem with the growth in internet access, declining connectivity costs and a rapidly-growing middle class with increasing disposable income. And then of course there is the mobile Internet phenomenon that is being driven by greater adoption of smartphone and tablet devices.”

Research conducted last year by the organisers of the SA e-Commerce Awards supports this view.

Nearly 60% of respondents said they were comfortable with conducting their research and buying directly online, with 49% saying they had a favourite online store at which they have made repeat purchases. The greater proportion spent up to R500 on a purchase, and made 10 or more purchases in a year.

Google South Africa country director, Luke McKend, said in February that the search giant expected to see even greater e-commerce growth in the country. This was based on the increase in search queries, particularly in shopping queries, which had grown by 55% in 2014 over the previous year compared to the overall search query growth of 37%.

“This speaks to the trend that there’s very little difference between online and offline purchases. People just think: ‘I’m shopping’,” McKend said.

Further evidence of the growing disposition to online shopping comes from First National Bank’s eBucks Rewards Festive Survey conducted at the end of 2014.

The primary finding was that 14% of respondents indicated they would do their festive season gift shopping entirely online. This had increased from the 10% doing so in 2013 and 8% the previous year. Reasons for shopping online included the ability to compare prices for the best deals, as well as convenience, delivery options, and unique items available only online.

“These insights support our conviction that the online economy presents unique opportunities to South African business owners,” says Hatfield.

For this reason, MTN Business has launched its Build Your Business Online (BYBO) service that provides an easy access point for businesses to enter the e-commerce space. Offering a framework consisting of industry-specific templates, the service allows business owners to register and set up a web site with a shopping cart and payment fulfilment functionality.

Additional value-add services include optimising the site for search engine results as well as marketing and social media interaction. Various BYBO packages are offered that cater to different size businesses and their specific needs.

Simply being online is no guarantee of success, which is why the marketing and social media elements have been included in the BYBO packages.

Hatfield cautions, however, that the value proposition has to be tailored to meet consumer demands. A key to differentiating, he suggests, is to focus on a niche in the market rather than playing in the general consumer market.

“A small business cannot successfully compete in that space. It cannot expect to be everything to everyone. As much as the online economy has removed the principle of first to market, the offering has to be truly unique to make inroads.

“The generalist market is already dominated by big online players such as Takealot while traditional retailers such as Makro also offer online shopping services.”

MTN Business believes that the first-to-market principle no longer presents the insurmountable barrier that may previously have prevented small businesses from competing and that a growing number of niche online businesses can easily turn the tables on even the biggest brands in the market.

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