Most SA e-commerce firms are less than two years old
DID YOU KNOW that some 72 percent of South African e-commerce businesses had an annual turnover of less than R500 000, with 59 percent of these being less than two years old? This was a finding of Heavy Chef E-commerce Entrepreneur Education report, which said this week that while e-commerce in Africa is here to stay, there was a need to fast-track the growth and support learning and development in a way that allowed for the participation and benefit of many more individuals and companies. The report looked at the state of industry and then how it could grow. It found that the Covid-19 pandemic had accelerated e-commerce by up to five years. The report also found that 64 percent of micro to small online shops operated full-time and 36 percent were side hustles. Some 71 percent of entrepreneurs were older than 30 years, while 63 percent of e-commerce businesses were founded by women. Some 85 percent of entrepreneurs found it difficult to attract new clients while 46 percent rated their marketing and sales skills as poor to average. About 52 percent wished they had invested earlier in digital marketing tools. Another 62 percent consider their knowledge of running a business to be poor to average. Some 52 percent of the e-commerce business owners said access to operational and funding partners was a priority. About 68 percent had no prior exposure to other e-commerce entrepreneurs when they started out. Some 71 percent still had limited access to networking opportunities. “With unprecedented growth in online shopping and new e-commerce shops being started, South African e-commerce still only accounts for 4 percent of total retail spend, 14 percent less than the global average. Thus in a context where we can expect a further surge of e-commerce activity – especially among informal and micro businesses – we have to ask how we are preparing entrepreneurs to build online businesses?,” the report asks. According to Heavy Chef Foundation CEO Louis Janse van Rensburg, the state of entrepreneur education was disparate at best, yet entrepreneurs still managed to organise themselves into peer learning networks. “Generally, entrepreneurs don’t feel that entrepreneur education – as it currently stands – is good enough. In response to that, entrepreneurs are generally self-organising as a community – they’re meeting with each other, organising meet-ups, events and learning sessions. They set up one-on-one coffee sessions to speak about their businesses,” Van Rensburg said. The report says 72 percent of entrepreneurs believed their peers have had the biggest positive impact on their business. The report offered insights. Insight one: In the past, online shops could organically grow their brands by creating and nurturing an audience without paid promotion. Today, the business models of social networks – and their innovation in advanced targeting tools in particular – demand that you have to pay-to-play if you want to increase your reach Insight two: The pandemic has driven more businesses online, in many instances out of necessity. This has meant that an increasing number of online shops are being run as full time gigs raising the stakes of ensuring success as livelihoods now depend upon it more than ever. Insight three: On almost all fronts the quality of platforms and support services on which e-commerce businesses are built have improved substantially. Choosing the right partners and fostering a productive relationship with them has become crucial to the success of any online business. The report said the way stakeholders in learning and development could support the development of e-commerce entrepreneurs in S was through mentorship, money and measurement. Mentorship: Create opportunities for start-up e-commerce entrepreneurs to meet with and learn from the founders of early e-commerce innovators. Money: Allocate budgets to design learning programmes tailored to the unique needs of e-commerce entrepreneurs – in online sales and operations. Measurement: Create a central data hub to track the effectiveness of e-commerce learning programmes and communicate insights back to the industry.