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Foschini joins SA’s e-tailer march

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Johannesburg - The Foschini Group (TFG) is following in the footsteps of Mr Price and Woolworths by turning to e-commerce to boost its revenues.

The Johannesburg Stock Exchange (JSE) listed retailer has switched on e-commerce capabilities for two of its 17 brands’ websites, meaning that shoppers with TFG account cards or credit cards can shop online at these sites.

The two revamped sites are TFG’s @home and TFG Mobile (hi-online) stores, while three of its sports brands - TotalSports, Sportscene and Due South - are planned to be e-commerce ready in the first half of next year. TFG has also updated its main website tfg.co.za

E-commerce forms part of TFG’s 2018 goal to generate 5% of its revenues from an omni-channel approach - which also includes using consumer applications, integrated mobile sites, a call centre solution and in-store sales assistance applications.

“At TFG we have taken a carefully considered approach to e-commerce,” TFG’s Chief Information Officer, Brent Curry, told Fin24.

“We have watched and learned from Mr Price and Woolworths – from their successes as well as their mistakes.

“We have been working on this launch for a year already, and have managed to avoid most of the errors others have made as a result. With the way in which the e-commerce market in South Africa is positioned in 2014, we believe strongly that the time is right now,” Curry said.

SA's emerging e-commerce space

South African retailers such as Mr Price have recorded small but fast-growing successes in e-commerce.

This month, JSE listed Mr Price reported online sales growth of 195.3% to R44.7m in South Africa for the half year period ending 27 September 2014.

Despite this fast growth, this is just a fraction of Mr Price’s overall sales of R8.3bn for the period.

Mr Price’s small successes in online have, however, occurred in South Africa’s relatively small but fast-growing internet market.

According to the World Bank, 48.9% of SA’s 50 million population had access to the internet in 2013 - a figure that has dramatically increased from just 24% in 2010.

But the percentage of connected South Africans using e-commerce remains low as Andy Higgins - former founder of Bidourbuy.com and managing director of e-commerce outfit uAfrica - told Fin24 that less than 1% of all retail sales in SA comes from online spending.

Higgins further told Fin24 that South African retailers are only waking up to e-commerce now as they see the “pain some international traditional offline retailers have felt from the pure online retailers”.

“In many cases they have been late to respond and I think as internet access starts to become more ubiquitous in South Africa, local retailers are starting to take preemptive measures so that they are not faced with a similar situation to their counterparts in more developed markets,” Higgins added, referring to the strong competition that, for example, Best Buy is facing from Amazon.com in the US.

Higgins went on to tell Fin24 that e-commerce in South Africa faces challenges that include reliable and efficient infrastructure that merchants can use to get their goods delivered to their customers.

He also said that local perceptions regarding secure payments and a lack of widespread internet access are also challenges.

* Follow @GarethvanZyl on Twitter. For more tech news, follow Fin24tech @Fin24_Tech.

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