E-commerce Barriers in South Africa

E-Commerce seen as an IT initiative: In the views of some of the key executives the idea that e-commerce is an IT initiative was quite prevalent.
 
March 12, 2012 - PRLog -- E-Commerce seen as an IT initiative: In the views of some of the key executives the idea that e-commerce is an IT
initiative was quite prevalent. That idea together with the Chief Information Officer’s role in many organisations is
often not weighted sufficiently relative to the directors of product areas. In businesses where e- commerce is doing
well, the product areas are driving it as an alternative channel to sell product and the CIO a key role in influencing
strategy. Although there are various approaches it is advisable to ensure that it does reside in a product area and that
the IT department are partnered to deliver the correct solution and architecture.
SA consumers are not ready : A widely held view is that due to the socio-economic challenges faced by SA, there are
too small a percentage of the population who has access to computers and internet. This has largely been shifted
through the growth of the smartphone, high speed mobile internet and the development of mobile applications for
commerce. There is also a belief that South African consumers will not readily pay delivery charges and that many are
either without credit cards or not trusting their use in online systems. Key to bear in mind here is the massive growth
in SA’s middle class, which in 2008 before the global financial crisis was said to be growing by 12, 000 people per
month.
The High Start-up Cost: A common concern among the executives was the cost of starting out in online retail. In
further investigation a common thread emerged which might point to the source of this concern. That is the lack of
knowledge of e-commerce which has caused many of these retailers to engage overseas vendors or consultants to
investigate the opportunity. These vendors often return expensive proposals from a capital investment perspective
but also in ongoing support and maintenance from an off-shore location. In our scanning of the SA e-commerce
solutions provider landscape we found that SA in fact has a plethora of internationally recognized online solution
providers. Some of these key facts are that companies like Kalahari.net is completely built and supported in SA.
SA does not have sufficient skills: There was a concern regarding the scarcity of skills in SA in the IT and
particularly in the e-commerce arena. This is mainly a genuine concern and businesses need to commit by
investing in supporting the training of additional resources in this arena.
Starting out is risky: A fairly common concern is that a retailer might invest a fair deal on capital and effort
only to have either too few benefits delivered or have the venture fail. Public failure could lead to the erosion of
customer service and brand equity. There are many alternatives here to reduce some of this risk. Collaborations are
probably the surest way in which to share risk and introduce an external partner. These can take the form of
collaborations with implementation partners, current online businesses, with fulfillment and delivery partners or
even partnerships with hosting companies.

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