Trends in SA's online shopping scene
Fin24

Trends in SA's online shopping scene

2013-11-27 17:37

Online shopping in South Africa is on the increase and Fin24 asked Krishna Motukuri, CEO of spree, to set the scene for what is happening in the industry.

How do you see the growth in online shopping?

As SA consumers become more familiar with the online environment and mobile and broadband penetration increase across SA, we see the online spend rise.

Statistics reflect this. The MasterCard Worldwide Online Shopping Survey reported that the proportion of South African internet users shopping online grew to 58% in 2012, up from 53% in 2010 and 44% in 2009.

A similar survey of internet users by the Digital Media and Marketing Association (DMMA) found that people who had spent at least five years using the internet were 59% more likely to shop online.

This is important, because it means that the number of online shoppers will grow as more South African internet users spend longer online.

The DMMA survey also revealed that 45% of online shoppers have spent far more money this year than the year before, further confirming this expectation.

Why are customers migrating online?

Consumers are becoming more comfortable online, with most of us having at least one social media account, using internet banking, and conducting a large portion of our business matters online.

In terms of fashion e-tail, shoppers cite reasons such as greater convenience (no queues;parking;jostling crowds;time-saving), more affordable pricing, the ability to purchase unique clothing that few others possess, in addition to greater variety, in favour of online shopping.

How (if at all) is e-tail disrupting traditional business models and how does this impact "bricks and mortar’ retail in SA?

I wouldn’t go so far as to say that online is displacing bricks and mortar.

However, what is indisputable is that it is definitely taking a far greater slice of the pie than previously.

I think the greatest impact that it will have on bricks and mortar retailers (at least at this early stage) is that an e-commerce offering will actually broaden its existing customer base.

Another recent study conducted showed that although 40% of the primarily "bricks and mortar" retailers surveyed agreed that its ecommerce offering only played a supporting role in driving the broader business performance, 70% agreed that it has boosted their sales tremendously in terms of broadening customer base.

Describe spree’s business model.

spree.co.za was launched in April 2013 as part of the newly created e-commerce division within Media24.

The e-commerce division was created with the purpose of leading Media24 into a future where we see media businesses generating more revenues from e-commerce than traditional advertising.

Spree's business model is based on the "shoppable magazine" concept, meaning that the collection is carefully curated and styled by in-house experts and shoppers are presented with beautiful editorial fashion spreads that have been styled to inspire them, similar to that of how a magazine would.

Leading magazine editors then also select and showcase their favourite items with advice on how and where to wear them, on the pages of their print publications and on their own and spree’s website.

It is this element of curation that differentiates us from competitors. In addition, we are the largest online retailer offering fashion wear from SA designers.

Challenges

Scaling our operations to meet the growing customer demand is definitely our biggest business challenge at spree.

We are anticipating a massive 1 000% growth this year. That kind of growth puts a lot of pressure on our infrastructure, so we are continuously investing in technology and people in order to scale fast.

Another  challenge we face is the  lead times of monthly magazines - getting them to feature products that will be available on the site at the same time that they go to print.  

The biggest trend in e-commerce?
 
Curation is the latest and biggest trend in e-commerce. Customers feel overwhelmed by e-commerce sites that offer everything under the sun, without any element of curation.

This has given rise to a new crop of e-commerce sites that are more personalised, with a move away from the sterile catalogue-type format.

- Fin24

* Fin24 and spree are divisions of Media24.

Comments
  • Rob Salvado - 2013-11-27 19:42

    The online applications are first class, the problem that will stop online business from advancing, however, is theft! Millions of Rands' worth of goods from both, local and overseas sites, are stolen. Some of the scams even sell you insurance to guarantee delivery but, that is just more money they steal! What a shame!

  • Ashraf Haroon - 2014-03-17 12:01

    would like to hear how much returns do the fashion on line business get I find it difficult to purchase an item of clothing without first fitting it on just been thinking does it not happen with most people they would rather want to fit before purchasing

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