The coronavirus pandemic and the national lockdown have had a big impact on South African online retailers.
Many retailers have stopped operating altogether, with others only providing essential services as required by lockdown regulations.
This means that sales revenues will drop for many local stores, especially those who do not stock essential items.
The list of essential products is periodically updated, and now includes a number of electronic and communication devices supplied to the education sector and essential services workers, including laptops, routers, and other hardware.
MyBroadband spoke to a number of prominent local retailers about the effect the COVID-19 pandemic and the national lockdown on their business – this is what they said.
Raru founder Neil Smith told MyBroadband they have seen a drop in sales, as they do not offer a wide selection of essential items.
“We have had a reduction in sales as we only offer a small selection of essential products,” Smith said.
“But overall sales of general items have been better than expected, even though delivery estimates are TBC for now.”
He added that while the company has seen a drop in sales, it recently optimised its operations which have helped it to weather the financial impact of COVID-19.
“We have been streamlining our workflow processes for the past year or so, which has resulted in our overall operation being very cost-efficient,” Smith said.
“This has definitely helped us during the very uncertain period we are currently in.”
Smith hopes that the purchase of non-essential items will pick up again soon after the lockdown is relaxed.
“Ecommerce is ideally suited to help customers acquire what they need without leaving the comfort of their homes or offices,” he said.
“So we foresee strong growth in general online sales once the non-essential restrictions are lifted.”
OneDayOnly continues to operate during the lockdown, offering essential items to customers.
“We continue to offer our best daily deals, for delivery after lockdown, but we’ve put our efforts into ensuring our customers have access to a broader variety of essential items.”
“Customers have responded positively and we are seeing encouraging sales figures, albeit slightly down on those pre-lockdown,” it added.
OneDayOnly said the full salaries of its more than 220 employees will be paid during the lockdown.
“We welcome the lifting of the lockdown when the time is right, but we appreciate the risks of prematurely lifting these limitations,” it said.
“We suspect it will take a few months to return to a degree of normality.”
Bidorbuy CEO Craig Lubbe told MyBroadband they have felt the impact of the coronavirus pandemic and the measures taken to contain it.
“The impact has varied by category. For example, we have seen an increase in trade in certain categories, such as bidorbuy digital download products, some essential products, and PPE or protective equipment,” Lubbe said.
“This contrasts with reductions in product listings from businesses which have not been classed as essential services providers and which have not been able to keep operating during the lockdown.”
“The government-mandated supply chain restrictions have also softened demand for products such as consumer electronics,” he said.
Lubbe said their analysis shows that customers are waiting to place orders as soon as deliveries are allowed. The company is using this time to focus on expanded partnerships with retailers and merchants across South Africa.
He added that Bidorbuy has not implemented any salary reductions or job cuts.
“However, the situation is continuously evolving and we support the initiatives from government-lobbying bodies to enact a relaxation of the restrictions imposed on ecommerce,” Lubbe said.
“This has been done in many other countries, in recognition of the fact that ecommerce offers a safe and socially-responsible way for consumers to acquire necessary goods.”
Lubbe added that there are reasons to be cautiously optimistic regarding sales going forward.
“We’re hopeful that our merchants will start to see their sales increase in the second half of 2020 as consumers start to look forward to Black Friday and the festive season again,” Lubbe said.
Takealot CEO Kim Reid recently stated that the national lockdown in South Africa would cost the online retailer around R350 million.
The company’s sales have plummeted since the lockdown began, which is leaving it in distress.
Despite adapting its platform to offer essential goods, Takealot is currently only seeing around 15% of its usual sales volume.
It has also had to cancel many orders for non-essential goods which were placed before the lockdown and could not be fulfilled due to the restrictions.
Like other ecommerce companies lobbying the government to ease restrictions on online shopping, Reid hopes the government will soon allow deliveries of non-essential items.