eCommerce may be the kick-start SA needs
JOHANNESBURG – With black Friday and Cyber Monday just around the corner, only a handful of South African companies have taken to the Internet to sell their wares.
While companies such as Takealot thrive, traditional bricks and mortar operations are fighting a losing battle against the shrinking economy and increasingly stressed consumers who are looking for maximum bang for their buck.
Pierre le Roux, chief executive of Moyo Business Advisory, which specialises in consulting services for data analytics and change management across a wide range of sectors, said many business people forget that Takealot and Amazon were also once start-ups before they became the behemoths they are now.
“It is vastly easier now to enter the field of e-commerce now than it was ten years ago. It has also become less capital intensive than it used to be with many software options that only have to be modified to a limited extent to get a new operation off the ground.”
Many small operations selling everything from cosmetics to amateur radio equipment have quietly entered the market servicing a niche sector and doing very well.
Brink of disaster
“We have seen companies on the brink of disaster turn their businesses models around and go from loss-making enterprises to becoming profitable thanks to the introduction of e-commerce and even more importantly, data analytics, in order to predict ahead of time which goods and services were in the greatest demand and to supply these timeously.
“Ranging from automated warehouses to ensuring adequate stock levels to supply the needs of consumers during peak time such as Black Friday and Cyber Monday as well as over the Christmas holidays, a data analytics model can precisely predict these spikes well before they take place.”
Le Roux said one problem that the ICT industry was struggling with at the moment was a shortage of skilled operators.
“South African universities are doing a fine job of producing graduates that can become operational within the ICT sector shortly after being hired but our problem is that not enough of them are staying in South Africa.”
He said the world-wide demand for high level coders, software architects and computer scientists was so high that many grads preferred working overseas for higher salaries than local operators were able to pay.
“A huge problem for us is the fact that many foreign students who study in South Africa – most of them from elsewhere in Africa – and who like to stay on were not being granted works visas by the Department of Home Affairs.
“It takes forever to get work permits for these men and women and then they are usually limited to two years which is exactly the point where they become at their most productive.”
Le Roux said the retail sector had been savaged by the economic downturn and about the only ray of hope on the horizon was e-commerce based on a sound data analytics platform to ensure that newcomers directly met the expectations of their clients.
“We have hugely qualified people who have the expertise and the know-how of how to implement these technologies but we need business people with the insight and capital resources to make this happen,” Le Roux said.
Le Roux said platforms like Facebook and Google offered great opportunities for newcomers to the e-commerce field to market and promote their enterprises even with limited capital resources.
“What we need are business people who can think out of the box to come up with ideas of what goods and services they want to bring to market.”
As examples he cited the two Internet-based banks that were being brought to market by two well-known South African entrepreneurs.
“While it is true that as one of the founders of First Rand Bank Michael Jordaan has had a vast amount of experience with banking, his new Bank Zero being an entirely Internet-based entity is a new experience for him as is Patrice Motsepe’s TymeBank.
Both with near-zero bricks and mortar exposure are up against a huge amount of competition form the four well-established behemoths in the banking business but because they have men of vision behind them, there is a good likelihood that their models will succeed.
BUSINESS REPORT ONLINE