Shaun Harris
taking Stock
You can search for and buy just about anything over the Internet these days – cars, books, shares, even (and it’s a sad reflection of the country’s recent high interest rates) repossessed houses.
But apart from the convenience, is it worth it, what’s the catch? Surely the online companies must be adding some mark-up to make profits from providing a website-based service that takes time and considerable money to develop?
At this relatively early stage of Internet shopping in South Africa, the answer seems to be no – it appears that the Net is offering good value at the moment for those intrepid shoppers not afraid to click the mouse.
The trick for online companies is to build up a subscriber base as quickly as possible. Much like the development of pay- television companies a decade ago, the new Net companies are prepared to offer low- cost services and considerable discounts and other incentives just to get you to register.
All that might change once they have built up the necessary critical mass to make their business commercially viable, but it does offer a window – perhaps for the next year or two – for shoppers to take advantage, with the necessary circumspection, of offers on the Net.
Consumers also tend to score because they are not the target of the big income potential of online shopping. That comes from the suppliers, through commission fees on sales (the bigger the customer base, the greater the volume of sales and the discounts Net companies can negotiate) and advertising on their website.
It seems to be, at this stage of e- commerce development, one of those rare opportunities where the consumer is all important. So maybe it’s worth taking advantage of.
A particular South African application for online shopping is the potential of extending it to remote townships and rural areas. Some companies are already doing this, and in other cases sharp people living in out-of-the-way places have quickly learned the advantages of trading online.
I decided to try the services of a McCarthy website, MegaShopper. What appealed most was the idea of having, in this case, groceries delivered to my front door at a time that suited me. The delivery charge is R39, but as an introductory offer it is waived for the first three drop-offs. A first-time R50 reduction on purchases worth more than R200 also seemed a good deal.
Well, despite not being the most Internet- literate person, the whole process worked like a charm. I later spoke to MegaShopper’s joint MD Lourens Botha, who told me that the prices displayed on the website were the same as on the shelf. Not paying the R39 delivery fee and getting a R50 discount was good value.
Botha sees potential for Net shopping as a cottage industry, and he’s probably right. All an entrepreneur needs is an online PC and a credit card with sufficient capacity (which would probably be granted as part of a small-business venture deal) to be in business. Online-shopping kiosks could spring up all over the place, if they haven’t already, like the explosion of telephone shops seen a few years ago.
But the company that really seems to see the potential for online shopping in rural communities is f@rm, a system developed by two farmers and a lawyer, with PQ Africa. F@rm already provides tailored websites for larger farmers represented by co-ops and agricultural unions, but wants to extend the service to smaller subsistence farmers and rural trading stores.
Once again the target for revenue is not the customer, but rather suppliers and advertisers on the site, www.farmers.co.za.
F@rm director Bruce Taylor says the idea is to find a centrally located small farmer who can order for a number of neighbouring small farmers and provide the necessary training and an online computer.
“Apart from convenience it will also give small farmers the buying power to negotiate discounts from suppliers,” he says.
F@rm is a bit nervous about the security issue of using credit cards over the Net, and realises that high banking charges are not appropriate for rural workers. So it works on a smart card system that can be used for online orders as well as the payment of wages, a big risk for farmers and workers at the moment. It has a pilot project in place at Ixopo, KwaZulu-Natal, where farm workers can make purchases and draw cash in town using their smart card.
The opportunities seem immense for applications of online shopping, and there are certainly bargains to be had at the moment.
It probably won’t last forever – more and more frequently I hear of Amazon.com book orders being intercepted by customs and import levies, taking the price advantage out of the system – so it’s best to get online now.