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New Business Trends  Internet Business
E-Commerce investigated
The use of the internet as an essential tool for commerce has traditionally lagged behind in South Africa in comparison to our first world counterparts. This is due to various factors, including limited access to the internet, high telecomms costs and the public's perception that transacting online is unsafe.
However, according to internet World Stats, Africa as a whole has seen a 429.8% growth in internet usage over the last five years, and high-speed internet access through ADSL lines seems set to raise this figure dramatically where the infrastructure is being developed. Although Africa as a whole represents only 2.5 percent of world connectivity, its rate of growth is higher than all other areas of the world, with almost 24 million people now online. South Africa, according to internet World Stats, the country currently has 3 600 000 internet users – up from 2 400 000 in December 2000. This is great news for our economy, as increased internet usage translates into growing revenue streams for advertisers and online retailers.
A key reason for this increase in usage is the fact that internet access is becoming more readily available in South Africa, and local consumers are now starting to see the value of the internet as an information and consumer tool and becoming more confident online. The barriers to entry to the market-place have been lowered for entrepreneurs, and online shopping has been seen to bring tangible benefits to retailers and customers through advanced technology solutions.
Increased consumer confidence in doing business online is evident upon examination of bidorbuy’s growth statistics over the past few months. In December 2005 the company turned over almost R2.5 million from over 6 200 transactions traded through the site. Figures for January-December 2005 show that bidorbuy experienced a 282% growth in turnover. Additionally, the website's annual turnover of R20 million is an increase of 65% on 2004, and the company expects turnover to grow to R100 million by the end of 2006.
These results are a clear indication of the fact that consumers are approaching the internet more innovatively today then ever before, increasingly seeking ways to save time in making purchasing decisions and open to online transacting. Historically, the general public has been skeptical of the effectiveness of privacy and security measures online, but the rise in business levels and internet usage levels indicate that negative perceptions of the medium are turning around.
As South Africa’s largest online marketplace, bidorbuy has made it easy to become involved in selling goods online, as the nature of the site makes it simple for potential sellers to ‘test the water’ and start by listing a few items before embarking on a more adventurous sales drive. Through its secure and sophisticated virtual trading place, people are able to buy and/or sell almost anything. It's an ideal opportunity to earn additional income, and selling and buying on auction is an exciting process which has proven successful for sellers as well as buyers – locally and globally.
Furthermore, with wireless internet access making it possible to access information and email from anywhere at any time, business never sleeps. A variety of wireless applications are being introduced to the local market, and as they applications become more affordable and accessible the e-commerce market is set to thrive.
Local companies wanting to penetrate this industry should get the mix right in terms of technology and service delivery to ensure an increased use of the internet as a consumer and business tool. America and Europe might have got the mix right a while ago, but South Africa is definitely on its way, making solid inroads into this sector.
By Andy Higgins, Managing Director, bidorbuy
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