Ecommerce sector is growing but offline challenges hinder further growth

Updated on 7 March 2016

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Today's top entrepreneurship and business stories (7 March)

Data presented by leading local operators at the recent eCommerce Africa 2016 conference indicates that the appetite in the market is healthy, even though ecommerce accounts for only R6 billion, which is approximately 0.8% of total retail spend.

According to Dirk Hoogduijn, CEO of online fashion website, Spree, the slow adoption is more of an offline ecommerce problem than online. “The underlying reason that ecommerce is not growing as fast as it should be in SA is not due to the online experience. Retail is over developed in SA, and it’s not helping ecommerce. The consumer doesn’t have the urgency to go online.”

South Africa’s retail density, calculated by metres of retail floor space per 1000 inhabitants in a country, is listed as second after the United Arab Emirates, a nation that is obsessed with shopping malls. There are 32 shopping malls per million inhabitants, ranking South Africa third worldwide after Australia and New Zealand.

“The ecommerce user experience is fantastic, but the offline experience is not good enough,” says Hooijdink. 80% of the questions his company gets are related to offline customer experience. Very few people complain about the design of a website compared to people who complain about not receiving a product on time after purchasing online.

Ipsos recorded that South Africans bought R28.8 billion worth of online goods in 2015, with R9.5 billion spent outside the country.

Hooijdink puts the rise of cross-border ecommerce by South Africans down to a lack of access to products as high-end buyers seek exclusive products overseas. Product curation and selection needs to improve, according to Hoogduijn.

Applications for the Western Cape Funding Fair extended

This year’s Western Cape Funding Fair application deadline has been extended. Applicants who wish to pitch their businesses for funding at the Western Cape Funding Fair, in partnership with Deloitte and the provincial Department of Economic Development and Tourism (DEDAT), have until 24 March 2016 to apply. Now in its second year, the project application date for the Fair has been extended for a further three weeks following a significant interest in the initiative from Western Cape businesses.

The initiative aims to connect businesses that require funding of between R2 million and R20 million, as well as R20 million plus, with suitable investors, and educate applicants on best practices to follow to turn ideas into bankable business plans. The Western Cape Funding Fair will be held at the Cape Town International Convention Centre on 25 May 2016 and shortlisted applicants will be announced on 19 April 2016.

“Due diligence is often overlooked by businesses that require funding. However, this is a vital step in the application process. As such, the Western Cape Funding Fair’s shortlisted applicants will be invited to attend an exclusive, free workshop on 4th May 2016, hosted by Deloitte and DEDAT in conjunction with the University of Cape Town’s Graduate School of Business (GSB) and Knife Capital, to learn how to get their business funding-ready,” says Marius AlbertsDeloitte Western Cape leader.

Vumela and Edge Growth launch boot camp for startups looking to scale

Vumela and Edge Growth have launched a new programme that focuses on accelerating the growth of established, high potential entrepreneurs, called 10X-e10X-e aims to help talented scale-up stage entrepreneurial teams scale themselves, scale their teams, and scale their businesses.

The 10X-e programme is a facilitated process designed to provide founding teams with handholding guidance from experienced serial entrepreneurs, to help them practically build the foundations for scale in their business over an 18-36-month period.

The three-day boot camp focuses on post-accelerator stage companies and provides a comprehensive introduction to both the pitfalls and the science of scaling-up.

Interested companies can sign up for a three-day Path to Scale Boot Camp in March by visiting www.10X-e.com. The 10X-e team will invite stand-out companies to apply for the full programme.

Vumela will sponsor the initial intake of five top applicants on a programme valued at R300,000. 10X-e selects disruptive businesses with clear product-market fit, a scalable business model, a team of two or more founders, three or more senior managers, R5m-R100m revenue, rapid growth, and all the problems growth brings.

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