South Africans are overcoming initial concerns over issues such as online security, delivery and limited internet access to increasingly embrace e-commerce, according to Grant Brown, managing director and chief operating officer (COO) at online fashion store Zando.
Zando was launched in 2011 by Africa Internet Group (AIG), delivering fashion items direct to the door of South African consumers, and Brown told Disrupt Africa the startup was “extremely happy” with its growth in South Africa.
“The online retail market share is still relatively small of total retail sales and as we see internet penetration increasing together with confidence growing in online consumers we are excited about the potential in the South African market,” he said.
E-commerce is considered a booming industry in Africa, with Frost & Sullivan estimating it will be a US$50 billion industry by 2018, though it faces challenges in terms of small market size and fears over security of online payments and whether products will actually arrive.
Though Brown admits the “traditional” issues still remain, he believes South Africans are overcoming them and increasingly adopting online shopping.
This belief was further backed up last week by a report by global market research firm Ipsos on behalf of PayPal and FNB, which found South Africans have an increasing appetite for e-commerce, with lower costs, fast and flexible delivery and safer ways to pay proving driving influences on the growth in e-commerce purchases.
Of those surveyed, 22 per cent said they had made purchases online and 48 per cent expect to do so in the future. Brown said this growing interest in shopping online was attributable to improvements in the industry in terms of online payment security and deliveries.
“There has been real improvement here with the introduction of initiatives like 3D Secure for card payments. Surrounding deliveries we offer free delivery and free returns as part of our value proposition, helping build the trust of the consumer,” he said.
“It is these changes in trust and reliability that are improving the confidence together with revolution of smartphones increasing the access to the internet.”
Access to the internet remains the primary barrier to e-commerce uptake in South Africa, according to Brown, but he feels the country, like the rest of Africa, is “leapfrogging” earlier stages of technology and immediately beginning paying bills using smartphones and ultimately shopping online.
“Zando has invested significantly here and our website is fully responsive ensuring that you have the same experience no matter what device you are using to shop on our website,” he said.
Disrupt Africa reported earlier this month on the views of Shopstar founder and managing director (MD) Jens Herf, who said people do not need to be taught to shop online but rather provided with tools that give them a better buying experience.
Brown for his part believes Zando is fulfilling this mandate by taking matters into its own hands when it comes to the major concerns around e-commerce.
“Zando delivers two-thirds of our own deliveries. This enables us to have full control of the customer experience, whether this is being able to provide accurate communication during the course of the customer delivery journey, the face-to-face interaction with our customers or being able to offer Cash on Delivery as a payment method,” he said.
“From a card perspective 3D Secure has helped build consumer confidence in online security. Zando uniquely offers cash on delivery to our customers together with EFT, eBucks and Pay@ payment methods. If anything we offer a wider variety than most other international online stores.”
He said the startup is “extremely proud” of its delivery performance, with Zando claiming to deliver 99 percent of orders on time and consistently beating customer expectation by a full day.
“We are able to offer express (48 hours), next day (24 hours) and three-hour deliveries to our customers,” Brown said, saying the startup had been able to do this by creating its own last mile logistics service while also partnering with leading courier firms in South Africa and “treating those partnerships as a collaboration resulting in a mutually beneficial relationship”.
