ONLINE SHOPPING - Afrikan Heroes

South Africa Records a Surge in Online Shopping

September 18, 2022

By Adrian Smith

With over a million employees within its rank, the retail industry in South Africa remains a major contributor to the economy, as it is the second largest employer after the government.

It is also the third biggest industry sector and contributes some 20% of the country’s gross domestic product.

Based on the recent surge in e-Commerce activity, it would be easy to assume that South Africa is headed towards a fully connected retail landscape, but yet there are factors inherent to the local consumer demographic that may dictate and restrict the extent to which a connected retail strategy can be rolled out.

Brick-and-mortar outlets still dominate the landscape, despite local retailers doing much to boost their online shopping capabilities during the COVID-19 pandemic, which saw a 66% growth in eCommerce as many accelerated their digital transformation strategies. A study released by Deloitte earlier this year found that more than 70% of South Africans are now shopping online.

Even with the easing of pandemic restrictions and a return of foot traffic volumes to almost pre-pandemic levels at physical retail outlets, online shopping activity remains robust and is projected to follow an upward trajectory in the coming years.

With online and offline shopping now evidently combining in South Africa, retailers are no doubt looking towards connected retail strategies to deliver omnichannel experiences for their customers – connected retail being services such as Click & Collect, Ship from Store, and Endless Aisle. However, unlike other markets, South Africa has one big hurdle to overcome in this space – the disparity between servicing urban and rural communities with retail offerings.

To a large extent, the South African retail market is a tale of two worlds, sitting on either side of the country’s so-called digital divide. Each of these consumer segments has its own unique needs, challenges, and expectations, meaning that there is essentially no one-size-fits-all approach to growing Connected Retailing across the country’s entire consumer base.

Consumers who are driving the uptake of online shopping are predominantly based in densely populated urban areas as they typically have access to more reliable internet connectivity and at least one or more smart devices.

These customers want instant gratification and are largely motivated to shop online for convenience, being happy to pay for their shopping delivered to their doorstep or to pick up their goods in-store.

They are also more conditioned to expect personalized shopping experiences via an omnichannel communication platform, so that they can engage with their preferred brands on their own terms, via their preferred channels.

At the other end of the spectrum is the consumer segment spread across South Africa’s remote rural areas, whose experiences and spending habits are distinctly different to those of the other urban-based consumer segments.

These customers often have limited access to resources and reside in areas with little or no network coverage, and sporadic power. Considering that the cost of data remains relatively high in South Africa, it is unlikely that these customers would buy data for the purposes of online shopping.

Instead of focusing on providing a fully connected retail experience, rural outlets should rather look at enhancing their customers’ in-store experience by looking to solutions such as smart point-of-sale (POS) and mobile retail solutions. These are designed to boost in-store performance, reduce operating costs, and enable quick and efficient services for both single and multi-location operations.

From a logistical perspective, even if consumers in these remote areas were to look to online shopping as a means to access the type of items that high-end stores provide in urban areas, the sheer distance and low population density in these areas would make delivery unfeasibly expensive.

So, the service offerings in these areas remain quite limited, even for large retailers, who normally offer a very limited assortment of basic products to far-flung outlets. Unlike the stores in urban centres, these outlets receive stock deliveries once a week, or even once every two weeks.

One way to address the issue of online shopping in remote areas – albeit to a limited extent – is to offer a click-and-collect option, where a customer can order an item online that is not usually stocked in the local outlet and collect it from the store once it arrives with the store’s regular stock shipment. However, delivery would take a long time and the experience would be vastly different to that of a consumer based in an urban setting.

Nonetheless, when aligned with measures to manage consumer expectations, traditional brick-and-mortar outlets can be used to enhance the online experience by providing a venue from which online customers can collect or return goods, which could speed up the process and reduce some of the retailer’s costs.

Thus, the brick-and-mortar store can act as a fulfilment centre for the online customer, as well as a way of strengthening the brand by making it concrete. How far eCommerce ultimately penetrates across South Africa’s retail landscape will depend on how aggressively retailers push these offerings into remote areas, but a fully connected retail experience seems unlikely in the foreseeable future.

Instead, a better fit for rural retail outlets would be a hybrid in-store and connected retail experience that would improve the customer experience, even if to a limited extent.

Arguably, one of the best ways for retailers to start thinking about the role their brick-and-mortar stores can play is to view them holistically as an ecosystem that includes the logistics/fulfilment side of operations.

Adrian Smith, Senior Managing Consultant, at Retail Directions.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

DHL Africa eShop Online Retail App Now In 34 countries

September 9, 2019

It would now be safe to conclude that DHL is positioning itself to become the largest logistics company in Africa, a network it could leverage to crush all existing logistics startups in Africa and invade all ecommerce businesses available across the continent. In its latest move, DHL has further expanded its Africa DHL Africa eShop business to 13 additional markets, increasing the presence of the global shipping company’s e-commerce platform to 34 African countries.

“For some of these countries no one has really tapped into e-commerce the way we’re tapping into it, with an ability to buy online and also buy online directly from places like Macy’s or Amazon,” MallforAfrica CEO Chris Folayan was quoted as saying, pointing to the novelty of online sales in many of Africa eShop’s new markets

Here Is All You Need To Know

DHL Africa eShop works by using startup MallforAfrica.com’s white label fulfillment service, Link Commerce.
The MallforAfrica’s model allows Africa eShop users to purchase goods directly from the websites of any of the app’s global partners.
This week’s expansion is the second for DHL’s Africa eShop, after adding 9 markets in May.
DHL’s moves run parallel to significant developments this year in the Africa’s online retail scene — namely Jumia’s big capital raise through its IPO.

List of Countries DHL Africa eShop Is Now Available In

DHL Africa eShop’s latest expansion efforts have seen the addition of these countries to the list: Angola, Benin, Burkina Faso, Burundi, Chad, Ethiopia, Guinea, Lesotho, Namibia, Niger, Sudan, Togo, and Zimbabwe.

DHL is leveraging existing startups across Africa to execute its programme. Users of the platform could make payments using local fintech options, such as Nigeria’s Paga and Kenya’s M-Pesa. DHL Africa eShop is also banking on its existing shipping delivery structure on the continent, through its DHL Express courier service.

In Practical Terms, This Is How Disruptive This Could Be

Under DHL’s disruptive order, someone with a mobile phone and bank account in, say, Niger can now use DHL’s app to shop at Macys.com and have anything from designer sneakers to kitchenware shipped to their doorstep in Central-Africa.

The DHL Africa eShop project is also getting aggressive as it is also offering incentives to entice first-time digital consumers.

“We will be launching with a promo, buy any 5 items from over 100 retail partners and get a $20 flat shipping fee. This is DHL’s way of showing they are dominant in shipping and eCommerce in Africa.”

According to online technology magazine Techcrunch, the launch and expansion of DHL’s MallforAfrica supported platform is creating a competitive scenario with e-commerce unicorn Jumia.

Jumia is Africa’s most visible e-tailer and operates consumer retail and online service verticals in 14 African countries. Headquartered in Lagos, the company raised more than $200 million in an NYSE IPO this April.

DHL launched the Africa eShop product the day before Jumia went public and made its first country expansion only weeks after.

DHL and partner MallforAfrica plan to bring Africa eShop to all 54 African countries in coming years.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

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Online Shopping Explodes

April 20, 2019

Latest figures from the United Nations’ Conference on Trade and Development show more people are resorting to shopping online around the world. Below is a quick summary of the facts and figures.

.Sales conducted on the internet increased by 13 per cent in 2017, reaching $29 trillion.

This number was made possible because, according to UNCTAD, more people resorted to shopping on the Internet. Hence, the number of online shoppers, moved up by 12 per cent so that a total of 1.3 billion, or one quarter of the world’s population now make sales through the Internet. However, though most Internet buyers bought goods and services from their domestic online shops, the number of people buying from abroad rose from 15 per cent in 2015 to 21 per cent in 2017. A significant percentage of this number came from buyers from the United States.

. More Businessmen are Buying from More Businessmen as against more Consumers buying from More Businessmen

The number showed that when the transactions involved two countries, business-to-consumer (B2C) sales reached an estimated $412 billion, making up for almost 11 per cent of total B2C e-commerce. Other B2C sales happened inside the countries. This represented about 4 percent increase from 2016.

The figures also showed that while transactions conducted between businessmen in these countries–that is business-to-business (B2B) e-commerce– has more than 88 percent of all online sales, B2C grew the more in the year under review. To be sure, B2C sales increased by 22 per cent to reach $3.9 trillion in 2017.

.More Online Sales Are Conducted in China Than Anywhere else in the world, while more Consumers in the UK are More Willing to Shop Online Instead of Visiting A Physical Shop.

The facts showed that more consumers in China bought directly from businessmen using the Internet by the accumulation of numbers over the years, obviously because of China’s largest population. However, UK consumers were the most likely to shop on the Internet because a staggering 82 per cent of people aged 15 and older made purchases online in 2017.

Overall, however, about 440 million consumers bought from businessmen on the Internet in China, making China the country with the largest number of Internet buyers followed by the United States, while the United Kingdom held on to third place.

.In Terms Of Who Made The Most Money From These Online Sales, US Did.

In fact, with almost $9 trillion, online sales made in the United States were three times higher than that made in Japan and more than four times higher than that made in China. Germany also overtook the Republic of Korea as the fourth largest online market.

.Findings From The Report Showed That There Is Still A Huge Gap In The Ecommerce Market.

The UNCTAD report showed that there is still a huge gap in delivering digital services such as insurance, financial services or business processes, especially in developing countries such as Nigeria, as the sector grew yearly by 7-8% over the decade, and they were worth $2.7 trillion in 2017.
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While developed countries still retain the market share, that is 77 percent, developing economies in Asia are seeing the biggest increase in exports over the past decade. Sierra Leone, a small-sized West African country emerged Third in digitally deliverable services, as a share of all service exports.

.What These Figures Mean

“The new figures show that e-commerce is indeed creating export opportunities. But the question from a development standpoint is whether businesses in developing countries are prepared to seize the opportunities,” UNCTAD Secretary-General, Mukhisa Kituyi, said.

“From an economic development perspective, this is important, because it shows the potential of digitalisation for businesses in developing countries that are producing such services,” said Shamika N. Sirimanne, who directs trade and logistics division at UNCTAD.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.