The ‘happy accident’ that blossomed into one of South Africa’s most successful businesses

When South Africans think of having a gift delivered to someone, Netflorist is most often the first name that comes to mind – however, it was not initially envisioned to be that way.

Now South Africa’s leading flower and gift service as well as the country’s oldest active online store, the story of Netflorist can be described as an ‘accidental success,’ tracing back 25 years ago to Ryan Bacher, Lawrence Brick, and Jonathan Hackner.

In the mid-90s, Bacher was the sales manager at NetActive, an internet service provider listed on the JSE that was founded by Brick and Hackner.

Part of NetActive was owned by the Massmart group, which boasted big retailers like Game and Makro. In 1999, the group wanted to put Makro online and have them develop in the e-commerce space – a space that was still in early stages of development in the country.

“We knew nothing about e-commerce, I mean very few people did, and because Makro was sitting on our board, they knew that we knew nothing about [it]” said Bacher at the Gordon Institute of Business Science.

Realising that they could not bluff their way through, they admitted that they had little knowledge of the space. Makro’s response was simple: ‘Go learn, build something, sell things, and then come back to us. Once you understand e-commerce, we’ll have you build our website.’

The trio began looking around to see what to sell and initially “we were only doing that in order to win Makro’s account, we didn’t really want to actually sell anything online as we were a services business,” explained Bacher.

They looked to the United States and came across a recently founded website called 1-800-Flowers.

With just two weeks to go before Valentine’s Day, they thought that this was perfect.

Bacher said that they thought that they build the site, add some roses, buy a couple themselves so that they have transactions for the site, send them to their partners and then go to Makro to say that they now knew how to build and run an online retail site.

The team then built a basic website in four days.

“It had one page, with 12 floral arrangements to choose from. There was a search bar, because we’d seen that other sites had one, but anything you typed in just redirected you to the same page,” said Bacher.

The ‘pay now’ button requested credit card details and then an egg timer would turn on the screen while we captured the details on our side, manually running them through a credit card machine and then accepting the order.

Leveraging their ISP database, they sent out an email advertising their new flower delivery service that was supplied by a florist in Cape Town.

The site was launched on 14 February 1999 and the response was overwhelming.

Despite having no stock or expertise in flowers, they made R30,000 in sales in its first two weeks of operation in February —equivalent to a month’s worth of orders for a single florist.

This led them to realise that there was a great opportunity here and they kept the site running after Valentine’s Day, ultimately leading to them deciding to turn Makro down.

“Our next steps were to research the flower market, grow our supply chain, set up a call center, and launch an affiliate program,” said Bacher.

Initially, NetFlorist expanded and relied entirely on a network of independent florists across the country to fulfill its online orders. This model allowed them to operate without holding any stock and focus solely on their online platform and marketing.

Between 2001 and 2003, they were just focused on gaining traction in the market, and affiliate marketing played a key role in the company’s survival and growth.

NetFlorist partnered with major companies like MTN, Woolworths, and Standard Bank, enabling these brands to sell flowers through their platforms.

NetFlorist handled all the backend operations while the partner company focused on marketing. This model ensured it had no upfront marketing costs, paying a percentage of sales only when a transaction occurred.

By partnering with established brands, NetFlorist was able to acquire customers and drive sales when the e-commerce market was still in its infancy.

This strategy helped the business remain afloat at a time when many online startups were failing. The dotcom crash had a significant impact globally, with many e-commerce companies unable to convert online hype and traffic into profitable sales.

Most startups had burned through their working capital on marketing, and when it came time to seek additional funding, they could not prove their profitability.

But thanks to its focus on sustainability and strategic partnerships, NetFlorist weathered the storm and emerged as one of the few survivors in the South African online retail space.

However, it did have its pros and cons.

“It boosted our sales, so from that perspective it really worked, but it was actually detrimental to our brand. In retail, all you are is your brand. You need to be one or the other, the brand, or the company behind the brand. You can’t be both,” said Bacher.

“We had loads of orders, but no-one knew who we were. It was an incredibly precarious position to be in. We were reliant on a few big contracts. What happened if those went away? We realised we needed direct control of our market.

“So by 2003 we changed our strategy and took the brand back. 

As NetFlorist matured, the company made a crucial transition from being an e-commerce site to a full-fledged retailer, which meant mastering key retail concepts such as margins and mark-ups (which he admittingly knew nothing about).

Bacher explained, “Retail is about the product you sell. The technology is not the most important thing.”

“Selling the product online is only one part of the journey. The logistics of delivery are complex, and it’s easy to become too reliant on suppliers,” added Bacher.

NetFlorist initially relied on a network of independent florists, but as the business grew, service levels were impacted by the florists’ system limitations.

Thus in 2007, the company made a pivotal move by bringing its suppliers, drivers, and florists in-house, growing from 11 to 150 employees in just one year.

In 2008, they established their own warehouse in Johannesburg, followed by one in Cape Town, allowing for better control over the supply chain, improved service, and higher margins.

Recognising the limits of the flower market, they expanded into hampers, jewelry, perfumes, personalised items and even launched a bakery to capture a larger share of the gifting market.

As NetFlorist continued to expand, Bacher acknowledged that customer loyalty online is minimal, and the key differentiator in the gifting industry is product and service innovation.

“We have to do things that are slightly different and difficult to copy as a way to build a moat around the business, or we will immediately attract imitators,” Bacher said. “The key is to focus on the core, while at the same time be good at exploring new things.”

Constantly adapting, it now sports warehouses in Johannesburg, Pretoria, Cape Town and Durban.

With no prior e-commerce experience, the founders quickly built a basic website in four days for Valentine’s Day.

Despite early challenges and the dot-com crash, strategic partnerships helped them grow and over time, they took control of their supply chain and expanded beyond flowers.

Now, NetFlorist has cemented itself as South Africa’s leading flower and gift service, enabling people to send personalised gifts to loved ones, friends and associates both locally and around the world; inspiring entrepreneurs with its adaptability and customer-focused approach.

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