SA online shopping problems?

Thor

Honorary Master
Joined
Jun 5, 2014
Messages
37,182
Imagine ebay and Amazon comes to SA


Then it will be
Takealot
Ebay
Amazon

And then the malls should be wallmart and then we have an America ! Whoop whoop !
 

rockNsurf

Well-Known Member
Joined
Feb 12, 2009
Messages
213
Sad to see Sybaritic and Prophecy go.
Very interesting infographic there - should have included what products they purchase.
Read about a local online store recently; it's a one-man show and its a blazing success
even tho the site-design is apalling. The guy did his research and sells male-potency
products, and the like. So the advice in this article seems sound:
NICHE PRODUCT (in-demand) + MODERATE MARGIN = SUCCESS.
 

HideInLight

Expert Member
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Oct 31, 2006
Messages
3,965
Can't the R/$ like drop to R9, we get things for R2 less for each dollar, retailers pocket R1 more for each dollar. Everyone happy!

Wishful thinking I guess.
 

lived666

Executive Member
Joined
Feb 12, 2007
Messages
8,630
meh..there will always be a few big ones and lots of little survivors. businesses always come and go...look at furniture city one day there...next day poof, nothing to do with online.
 

Swa

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May 4, 2012
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Nobody can compete on a 5% markup that is still more expensive. Takealot is subsidising their business from other sectors but that is not a sustainable business model. What needs to happen is for small businesses to pool buying power so that we can remain competitive, make profit, and provide the support that is lacking with large retailers.
 

Polymathic

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Mar 22, 2010
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13,718
The problem most South Africans are technophobes, I know so many under 30s who only their phones for making phone calls, whatsapp and BBM and they don't even own a computer
 

Rocket-Boy

Executive Member
Joined
Jul 31, 2007
Messages
7,689
Sybaritic and Purple Fly Trading are in liquidation; Prophecy, Have2have, and a host of former Naspers properties have shut down their online shopping operations;
Sybaritic wasnt too bad but didnt offer free shipping which made them less attractive.
Purple fly... well just take a look around the forums for comments on them.
Prophecy was great, bought lots of hardware over the years from them. Quite sad about that one.
Have2have, errr lol their pricing was an absolute joke. Sure they mirrored Amazons catalogues and you could get stuff from them without importing yourself but their markup was often well over 200%
 

Paul_S

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Joined
Jun 4, 2006
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4,506
Read about a local online store recently; it's a one-man show and its a blazing success
even tho the site-design is apalling. The guy did his research and sells male-potency
products, and the like. So the advice in this article seems sound:
NICHE PRODUCT (in-demand) + MODERATE MARGIN = SUCCESS.
That guy's business model will fold tomorrow if one of the big players decides to start tapping the same market as him.
It's becoming harder and harder to be a small producer or reseller due to scale of economy.
 

Impulse_One

Senior Member
Joined
Jan 8, 2014
Messages
559
The problem most South Africans are technophobes, I know so many under 30s who only their phones for making phone calls, whatsapp and BBM and they don't even own a computer
My sentiments exactly. A quite bunch of people could afford computer and proper internet, yet they own DSTV subscription. But noo... They have no idea what I am talking about regards internet stuff (latest TV series, trends, etc), giving me a smile as if I'm talking about manned space flight to next door galaxy, though there is nothing about space in discussion. They have no idea of what they are missing on! (And that's why my area is not VDSL enabled, while surrounding areas in same suburb do have VDSL)

People's mindset should be changed and then we would have proper internet with breakeven mechanics. Prices are not only problem as many think, mentality is.
 
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noxibox

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Apr 6, 2005
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17,593
This is the way it works everywhere. Those with the deepest pockets drive everyone else out of business.
 

McT

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May 19, 2009
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Sybaritic and Purple Fly Trading are in liquidation; Prophecy, Have2have, and a host of former Naspers properties have shut down their online shopping operations; and the Competition Commission recently approved the merger between Kalahari and Takealot.
I was wondering what was going on with Purple Fly. This makes sense now. Sad for Prophecy. Have2Have was just too expensive and felt they were directly up against Wantitall.

As a regular online shopper, I am crossing fingers that it remains competitive, attractive and diverse.
 

TheGuy

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Sep 14, 2009
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I'm an average 30 year old that is computer literate but for some reason the only things I buy online is a book once a year from Kalahari. I have not really found the value in buying things online.


Maybe so company should investigate why as I'm sure there are lots of other people like me.


To note I lived in the UK for a few years when I was younger and I used to buy and sell stuff there online often.
 

LCBXX

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Apr 11, 2006
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10,557
I am still curious on how brick & mortal Computer shops remain open. I recall the 1990 heydays of the PC in South Africa where computer shops were abundant, floundering and closing doors at the turn of the century. Unless it is only in Gauteng, the computer shop is opening its doors again with pricing competing with most online PC hardware retailers.
 

ghoti

Karmic Sangoma
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Jan 17, 2005
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45,692
Purple Fly Trading should have been closed down a long time ago and the owner arrested :D
 

MagicDude4Eva

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Apr 2, 2008
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Even the Takealot merger will have it's issues - if you missed the 702 interview - listen to this to put it into context - https://soundcloud.com/primediabroadcasting/shapeshifter-kim-reid-14-january-2015

While a 1bn Rand investment is significant, the cash-burn rate is going to be insane:
- After the merger the new entity sits with over 900 staff. It is obvious that the majority of staff will be laid off, but staff expense will easily amount to 15-20m per month (if you work on a low average salary of 15K/pm per staff - I think that total staff cost at current levels would be over R100m/per year)
- The new entity will build two 30,000m2 warehouses - if you look at latest technology in warehousing and if those warehouses are build from scratch it will cost about 80-100m per warehouse
- There will be a huge amount of technical issues (Kalahari runs Hybris on SAP and Takealot runs a mix of Mysql, PHP, Python, Django, AWS) and Kalahari needs to support warranties for at least 3 years - so you either run the old system in parallel until you switch it off or you migrate order records over - which will have it's own challenges.
- The 1bn turnover goal in 5 years is very low (according to the interview it is for the combined entity). I thought that both would each do about 300-400m/pa already (this is not a lot - about 30m per month or roughly 50,000 orders)

As long as your online business is based on commodity products, even your customer service and speedy fulfilment will not be a competitive edge for your sustainability. It is clear that Alibaba/Amazon will enter the local market within the next 5 years (they have to, as Walmart is currently pushing in) and it is doubtful that an Amazon/Alibaba would buy out Takealot (which would go at a 3-4bn Rand valuation) - this would be cash wasted and Amazon for example has been very efficient in opening up local offices.

The electronics-/computer online-market is currently being eroded by the big players literally charging out at cost+VAT and we all know that this is unsustainable and will need to rebalance. Many of the smaller players ignore current opportunities and eventually burn out.

BTW: Naspers is busy selling off Allegro which was initially acquired for over 10bn Rand in 2007 - makes one wonder where this cash will go.
 

ghoti

Karmic Sangoma
Joined
Jan 17, 2005
Messages
45,692
I'm an average 30 year old that is computer literate but for some reason the only things I buy online is a book once a year from Kalahari. I have not really found the value in buying things online.


Maybe so company should investigate why as I'm sure there are lots of other people like me.


To note I lived in the UK for a few years when I was younger and I used to buy and sell stuff there online often.
Im 30 something and my family buys almost everything online. I dont think its a company issue, but a people issue. Some people struggle to adapt to change and get stuck in their ways. They will die out.
 
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