Online means real business – local ‘digital’ entrepreneurs tell all

Online means real business – local ‘digital’ entrepreneurs tell allThere is money to be made online. According to the Effective Measure/IAB South African eCommerce report,  the top five most popular websites in South Africa in 2014 are e-commerce sites.

And not only that, but the report also revealed that the majority of online shopping is devoted to South African sites (84.33%), with Effective Measure Country MD South Africa, Alan Morrissey saying:

“South African loyalty to local products and services represents a huge boost for the economy. Marketers need to retain this momentum as global retailers aggressively enter the South African market,” he said.

It’s clear that South African entrepreneurs are in a position to benefit from the e-commerce boom. We speak to virtual entrepreneurs across all sectors, to find out why they chose to take their business online, and the challenges they face.

RETAIL
Michelle OkaforMichelle Okafor African Designs, online African fashion retailer, 2 years

What service does your business provide?
We are a small fashion design business and we specialise in making African print ladies wear with 100% African wax prints that we source from West Africa.  Our garments are manufactured locally. We also make African print handbags and printed pumps.

What do you think are the key difference between physical and online businesses?
Around the clock accessibility.  Essentially your brick and mortar store is open from 09h00 to 17h00 and when the shop door closes, business ends for that day.  However, with an online store you have access to the company’s website and if it’s an ecommerce site you can buy and pay for goods instantly and have it delivered to you by the next business day.

What are some the advantages you have found in working in the online space?
You can make money while you sleep.

What are some of the disadvantages of running a business online?
Most online shoppers are still weary of ordering and paying for goods online. However, once a customer has made a successful online purchase, they are more likely to repeat it and tell others about it.

Secondly, since we are in the fashion industry, there are sometimes the issue of sizes.  The customer may not know their size or they may order the wrong size, or sometimes standard sizes differ from supplier to supplier.  However, if you have a good returns/exchange policy in place, this will inspire confidence.

How do you think South Africa is doing in terms of adoption of entrepreneurs’ adoption of the online platform?
I think the general population is doing well with adjusting to the changes of entrepreneurs and their businesses, as they are stepping onto the online shopping platform.  All the customer really wants is to know is that he/she is going to get what they paid for, within the time frame that is stipulated.

ONLINE TAX CONSULTANCY
Evan Robinson, Director and CTO of Digital tax assistant, TaxTim, 3 years

What service does your business provide?
TaxTim is an online SARS-approved digital tax assistant who makes doing your tax return quick and easy.  Do it right first time and maximise your refund and tax compliance. Answer simple questions one-by-one and get the guidance you need to do your own tax returns with confidence.

What are some the advantages you have found in working in the online space?
Being an entrepreneur in the online space allows one an almost infinite ability to be creative and to build great products that can take on the world. Now more than ever it is possible for a small dedicated team to build extremely popular and very disruptive (not to mention lucrative) digital products.

What are some of the disadvantages of running a business online?
The difference between running a bricks and mortar store and an online store is that customer interaction is significantly reduced. Instead of being able to see customer reactions to your products or your store directly, you have to use analytics tools to measure customer behaviour statistically. This rather dry approach can be tough to get meaningful results from, but its benefit is that it is readily quantitative.

Additionally, people often think that creating an app or website online is enough to get the ball of success rolling, but fail to realise how big the web actually is. Just existing is only the first tiny step in a far longer journey of finding ways to become significant online.

How do you see as the ecommerce/online businesses growing in the next 5 to 10 years?
I see more of the large international players setting up development offices in SA. Big brands like Google and Amazon already feature prominently, with SA coders working locally on significant international deployments in the cloud. We have the talent, but more young people need to know that starting their own business online is possible.

I am optimistic that government and corporate assistance through incubator programmes, assistance, mentorship and funding will do great things to make SA a leading source of innovative ideas that solve both African and international problems in a world class way.

PERSONAL TRAINING
Ronald AbvajeeeMy Personal Trainer, a online personal training service

What service does your business provide?
We provide exercise and nutrition plans tailored to our clients goals, with the support of our Virtual Trainer which includes; social media engagement, weekly motivational videos, in-bound and outbound engagement and interaction with your very own Personal Trainer through email, mobile phone and Sype.

What do you think are the key difference between physical and online businesses?
Online, allows us to reach more customers, and engage with them and motivate them to achieve their health, fitness and body goals, wherever they are in the world. Thus scalability is the key driver for online development of ones business.

With physical business, especially in ours, we are limited by clients and trainers location to the client.

What are some the advantages you have found in working in the online space?
Working in the online space gives you access to a global audience. Customers from around the world are able to learn about and purchase products and services, 24 hours a day, seven days a week.

Perhaps the biggest advantage of using the Internet for business is its cost effectiveness. Opening and maintaining an online store costs a fraction of the budget required to open a physical shop. Advertising online is less expensive than in traditional media, and it allows business owners to reach a more targeted demographic.

What are some of the disadvantages of running a business online?
Technology is constantly changing and we need to keep abreast of the changes and enhancements constantly, to ensure customers receive expert and world class service.

Also not everyone is a technology expert, thus finding the right IT partner is critical in insuring the success of your online business. Ideally you would want to work with a team who has technology expertise as well as marketing understanding to ensure you maximize your online space opportunities.

A great piece of advice I received from a mentor was that there is no need to bring the IT in-house, as its not what the core focus of my business is.

How do you see as the ecommerce/online businesses in the next 5 to 10 years?Ecommerce will only increase in value and opportunities in the next 5 years, more trade and sales will be down, as payment gateways improve, and with mobile payment solutions on the increase sales in the virtual space will become an opportunity entrepreneurs will capitalise on.

WEBSITE DEVELOPMENT
Emma Donovan and Dominique KotzéYellow Door Collective, 5 months, 3 years collaborating

What service does your business provide?
My business partner Dominique and I run a digital agency in Cape Town called Yellow Door Collective. We do the majority of our work online and have recently launched a website Starter Kit – to create simple, user-friendly and stylish websites for SMEs. The entire process takes place online within 15 days.

What do you think are the key differences between physical and online businesses?
Dominique: In a physical business, you have the opportunity to gain your customers trust through face-to-face interactions and build relationships with people this way. In an online business, you have to be really professional, quick and efficient to impress people and make a good impression, as you don’t have the opportunity to charm them offline.

Often, online interactions are difficult to interpret so it is important to make sure that all communication is clear and straightforward, so that none of your correspondence can be misunderstood.

What are some the advantages you have found in working in the online space?
Emma: Being able to work from anywhere is a huge plus; whether it’s from home on a rainy day or to extend a trip overseas and enjoy the destination around working hours. Another advantage is saving time that would otherwise be spent driving to meetings, and gaining a few extra productive hours in the day.

From a financial point of view, the set up and running costs for an online business tend to be much lower, as you don’t need as many fixed assets or big loans to set the business up.

What are some of the disadvantages of running a business online?
Dominique: It often takes a bit longer to establish trust/ build a relationship with a client. It can also be challenging to employ people as it is a new environment and not always easy to define the job responsibilities. People are often more comfortable working in an environment that looks familiar – a big office with desks and boardrooms looks more appealing than a small office with people staring at computers, or worse, a business run from home.

How do you think South Africa is doing in terms of entrepreneurs’ adoption of the online platform?
Dominique: We are privileged to work with a number of South African freelancers and young entrepreneurs who are successfully running their businesses online – it’s an exciting space to be part of. I think we are a few years behind countries like the US and the UK, but in terms of keeping up with the rest of the world, I think we are doing pretty well considering the issues we face such as slow internet speeds and electricity outages. Cape Town is a hub of energetic online entrepreneurs, with places like the Bandwith Barn and the Solution Space popping up and providing places for networking and creative working environments.

VIRTUAL PERSONAL ASSISTANTS
Gaynor Paynter (pictured) and Alison FourieTAVASA, a virtual assistant, typing and transcriptionist business, 7 years in operation

What service does your business provide?
We make use of technology such as email, Skype, Dropbox and secure servers. This enables us to provide services to South Africa as well as to international clients. There are many of our clients who we have never met or even spoken to. However, we also accommodate those who wish to meet us in person.

What do you think are the key difference between physical and online businesses?
With an online business you can get straight to the point. Working in your own environment has many conveniences. Our kids are teenagers and while they are pretty independent, we are at home with them and we don’t need to employ someone extra to look after them and the same was true right from when they were very young. It’s also less stressful for clients for many reasons including instead of having to physically meet, a simple email or Skype meeting will suffice saving much time driving, finding meeting places, etc.

What are some the advantages you have found in working in the online space?
We always say that if anybody has good access to the internet there is no need for them to be unemployed. The internet provides opportunities that we may not even have discovered yet. It opens a world of opportunities in marketing and advertising. Almost all of our marketing is online, and one of the things that Alison drums into newbies is ‘take marketing breaks, not tea breaks’.

What are some of the disadvantages of running a business online?
It can be a lonely space if you work long hours and don’t have anyone around you. Some things you can do to counteract this include joining associations such as TAVASA where you meet other like minded individuals. And you can be affected by service providers such as your internet service provider, Eskom, etc, etc. When they have problems, so do you. But the advantages far outweigh the disadvantages

How do you see as the ecommerce/online businesses in the next 5 to 10 years?
In South Africa a lot depends on the infrastructure / service providers. The internet we have here pales in comparison to other countries. The electricity and water crisis is a huge worry. Data and electricity costs are also a large encumbrance.

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Lebohang Thulo
Lebohang Thulo
Lebohang Thulo is the editor of SME South Africa. She enjoys keeping up with the country’s exciting and fast developing entrepreneurship ecosystem. You can find her at @lelele3