Ask Andy Higgins anything about eCommerce

[Melissa7]

Current figures say that e-commerce in South Africa stands at 1% of the total retail market, at approximately R9bn or about $663m.
In the US, e-commerce comprises 13% of the total retail market at an estimated $450bn. That means e-commerce in the US is 678 times bigger than in South Africa.
1. Can you confirm the following figures?
2. What do you believe this means for growth in South Africa? Are we set for this percentile growth?
3. Can we ever achieve these levels of rampant consumerism?

 

[Andy Higgins]

Hi Andy,

Which technologies do you leverage to increase the speed of access and load balancing on a site like Takealot to make sure user experience stays good on a high traffic day like Black Friday or Cyber Monday?

I would use a solution like Shopify where you can rest assured that any traffic you throw at the site would not even be a blip on the radar. If you have some other hosted solution, I would at least implement something like Cloudflare.

If you have gone the fully hosted solution I am a fan of AWS services so you could go the cloudfront, load balancer, RDS, docker / beanstalk with auto scaling route but I would avoid that, if possible for a pure play eCommerce site.

 

[Andy Higgins]

Hi Andy

What advice could you give someone who has an online store, who's competing against the likes of Takealot. They obviously have allot of advantages over smaller companies, and their service is relatively good.
So its hard to think of an area too beat them in except for perhaps having more knowledge on specific products as we are a "speciality products" store sellingselling nutritional products. So Takealot wouldnt be able to give advise om products at all.

I make use of most of your services, which have made it allot easier for me to run the store, especially on the courier side. So thanks allot for that.

I think you are already doing what you can by selling more speciality products and being an expert in your field.

The only other route is to try and become more vertically integrated in the supply chain i.e. where you become the supplier or preferred supplier to the likes of Takealot for some of the products you sell. A company that has done this internationally for example is Harrys. They own the factory that makes their products and they sell directly to their end user.

You could also try and focus on building your brand to build loyalty with your customers (especially for repeat purchases). Easier said than done I know.

Always great to hear from one of our customers. Thanks!

 

[Bryn]

Unless you have very specific requirements, I would recommend starting with a cloud based solution like Shopify (no server required). Even if you are technically minded there is no need to have to worry about hosting, upgrades, backups, spikes in traffic etc. We work closely with Shopify so I am biased but sign up for a free 30 day trial and try it for yourself.

What happened to the 0% transaction fee special deal?

So many businesses drop the idea of Shopify the moment they hear about additional transaction fees. Has anyone at uAfrica had stern words with Shopify about how much their transaction fees suck for a pricey platform?

 

[Andy Higgins]

Hi Mr. Higgins,

With individuals being featured on mybroadband.co.za, we noticed that there are mostly white people who have made significant strides in the tech arena and building multi-million rand businesses.

Why do you think there aren't any more successful black innovators? And what is keeping them from reaching the point you and many others have reached?

Thank you,
E

This is something I think about a fair amount and am sorry to say that I don't have a compelling answer. There are the obvious historic reasons in South Africa. I truly wish that by now there were more black business success stories. I have no doubt they are in the making and we will see them in due course. Building businesses is not a zero sum game. I believe success breads success. Myself and my white counterparts no doubt need to do more to help black entrepreneurs.

Referring to tech specifically, diversity is of course a worldwide problem. I think to some degree networking plays an important role in building these businesses and there can tend to be a bit of an "old boys club" when it comes to tech in general.

 

[Andy Higgins]

What happened to the 0% transaction fee special deal?

So many businesses drop the idea of Shopify the moment they hear about additional transaction fees. Has anyone at uAfrica had stern words with Shopify about how much their transaction fees suck for a pricey platform?

Yes. We have had words. Unfortunately that is how it is moving forward (lucky for those who have an older site when there were no transaction fees applied, which have been grandfathered).

Still, once you get to scale to pay $300 per month plus 0.5% for what is essentially an infinitely scalable platform will be hard to beat (from a technology cost point of view - once you have reached scale that is)

 

[Andy Higgins]

Current figures say that e-commerce in South Africa stands at 1% of the total retail market, at approximately R9bn or about $663m.
In the US, e-commerce comprises 13% of the total retail market at an estimated $450bn. That means e-commerce in the US is 678 times bigger than in South Africa.
1. Can you confirm the following figures?
2. What do you believe this means for growth in South Africa? Are we set for this percentile growth?
3. Can we ever achieve these levels of rampant consumerism?

I have seen a number of reports with quite different figures. I think it is hard to pin this down because some include travel related sales and others include International / cross border transactions etc.

1. If comparing with traditional (offline) sales most would agree that it makes sense to exclude travel and transactions outside South Africa. In this case, the R9 billion figure is probably the most accurate we have to use currently.

2. I think we could grow faster than other markets because we have some catch up to play. Surely our 1% of retail should at least reach higher single digit percentage figures in the next 5 to 10 years. Surely.

3. I don't think we can ever compete with the USA on their "levels of rampant consumerism". And I hope we don't because that would probably mean a more indebted society, which I think is a bad thing.

 

[Bryn]

Yes. We have had words. Unfortunately that is how it is moving forward (lucky for those who have an older site when there were no transaction fees applied, which have been grandfathered).

Still, once you get to scale to pay $300 per month plus 0.5% for what is essentially an infinitely scalable platform will be hard to beat (from a technology cost point of view - once you have reached scale that is)

Thanks Andy. Fortunately I have a store grandfathered in. And I agree that the value is very good nonetheless.

Another query related to uAfrica I have relates to expanding beyond SA. You've mentioned going from SA to Southern Africa to sub Saharan Africa etc. as a more realistic rollout. Does uAfrica have plans to make this possible for clients that totally rely on their system for shipping? The name is uAfrica after all.

 

[Andy Higgins]

Thanks Andy. Fortunately I have a store grandfathered in. And I agree that the value is very good nonetheless.

Another query related to uAfrica I have relates to expanding beyond SA. You've mentioned going from SA to Southern Africa to sub Saharan Africa etc. as a more realistic rollout. Does uAfrica have plans to make this possible for clients that totally rely on their system for shipping? The name is uAfrica after all.

Yes. We literally get asked the question about International shipping on a daily basis so the demand is definitely there and is therefore high up on our priority list. It however comes with a number of challenges compared to local shipping and I have to take my own advice and make sure we nail down South Africa first.

So we don't have a time estimate but it is something we are looking into seriously.

 

[rpm]

This concludes the “Ask Andy Higgins anything about eCommerce” discussion.

Thank you Andy for agreeing to be part of this discussion, and for providing such valuable answers to the questions.