Government’s ‘U-turn’ on e-commerce decision good news for industry

By Edward West Time of article published May 18, 2020

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CAPE TOWN -  The government’s ‘U-turn’ on e-commerce is good news for the online retail, and the courier, logistics and freight forwarding industries.

South Africa had been one of the only countries in the world to shut down online e-commerce, apart from the sale of essential goods, during its Covid-19 lockdown. Since the lockdown started in March 26, retailers had consistently lobbied the government to allow unfettered e-commerce and for the delivery of goods purchased online.

Prior to Covid-19, e-commerce contributed 1.4 percent of national retail sales, according to the Online Retail in South Africa 2019 study conducted by World Wide Worx. In line with the growth of e-commerce internationally, this figure was expected to double by 2022.

Local courier companies that had geared up for 18 months of solid growth, but it all came to a halt due to the lockdown.

"What we’re seeing is a tsunami of consumers ready to jump into online shopping, simply because it's a necessity to stay home and, for many, work from home. The courier industry has become an enabler to achieve that, we bring the goods to you, and we'll do it safely through our new contactless delivery process.

“We are expecting massive volumes from the major retailers that we service, but also the smaller shops who have been working hard to bring their business online," said Hilton 

Eachus, chief customer officer at DPD Laser, which operates under the Dawn Wing brand.

According to an analysis by ACI Worldwide, global e-commerce sales in April experienced a 209 percent growth compared to the same period last year.

SA Express Parcel Association chief executive Garr Marshall said their industry was down to about 30 percent of the norm through the lockdown, but since Level 4, because of the extension of commodities into permitted products - allowing logistics companies to transport both inputs and outputs for manufacturing organisations, the figure returned to about 70 percent of capacity.

Proudly SA and its online shopping and business-to-business platform on Friday also welcomed the relaxing of regulations around e-commerce.

“The opening up of contactless online transactions for all goods and services that are not prohibited under the terms of the current stage of national disaster, means that small companies who do not have retail premises and companies whose products are not on the list of shop tradable goods, now once again have full access to market, said Eustace 
Mashimbye, the chief executive of Proudly SA.

Mashimbye said e-commerce represents R20.3 billion in retail revenue per year in South Africa and so the loss of earnings over the past few weeks by all those companies involved in processing a purchase was significant.

Business for South Africa spokesperson Martin Kingston jobs would be saved and lives improved with the lifting of the ban on e-commerce.

“As these amendments rightly say, e-commerce is a critical enabler of a more open economy, it reduces the density of consumers in retail spaces allowing for social distancing, it can accelerate innovation and it can support local manufacturing and increase access to goods by small businesses in the informal market,” said Kingston.

BUSINESS REPORT 

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