Fraud and broadband holding back e-commerce in SA

South Africa’s growing Internet population bodes well for e-commerce in South Africa, but the relatively slow broadband speeds, fraud and high shipping costs must be overcome to further drive online shopping. This is according to Bidorbuy CEO, Jaco Jonker.

“These days, the internet population of South Africa spends a large part of their time online, for banking, social networking, and product research prior to purchasing. So, it is a natural progression that they are increasingly becoming comfortable transacting online,” said Jonker.

According to Jonker there are many reasons for people to buy online. “Online shops are open 24/7; there’s no need to start a car to go shopping; the online range of products usually beats what one can find in a brick-and-mortar store and the information presented online is usually more readily available,” said Jonker.

“Still, I would say that the biggest driving force behind the growth of e-commerce in South Africa is attractive pricing.”

The Bidorbuy CEO said that they are seeing many new online players entering the market. “There are international investments into online businesses and increased marketing around online businesses. All this raises the visibility of ecommerce and attracts more consumers online which grows the entire online economy,” said Jonker.

Broadband, fraud and delivery constraints hold back online commerce

Jonker said that cheap, fast broadband is still not available in South Africa, essentially holding back online commerce.

“There has been a significant progress in South Africa regarding broadband speeds and pricing, though we are still far behind developed economies on both counts. Access to a cheap, always-on, reliable internet is crucial for online economy in South Africa,” said Jonker.

Jonker added that the biggest concern to many online shoppers is fear of fraud and of their personal details being divulged to third parties.

“Another restriction often cited by bidorbuy sellers and buyers are delivery considerations. They are concerned about high shipping costs and potential delays. This goes hand-in-hand with the desire for instant gratification with shoppers wanting to receive their product straight away,” said Jonker.

Mobile is a key strategy

Jonker said that extending their mobile roll-out is a big focus area for Bidorbuy this year. “We expect that many new internet users will come to bidorbuy via their mobile devices and aim to cater for more users on more devices,” said Jonker.

“We have improved our mobile website to cater for smart phones and for feature phones. We have launched an iPhone app. Later on this year, we plan to roll out our Android application.”

The company has also introduced its Stores service recently, allowing individual sellers and large businesses to have a branded presence on Bidorbuy.

“We have also just launched bobBucks, our bidorbuy vouchers. We use bobBucks for promotional purposes, and also allow users to buy bobBucks Gift Cards,” said Jonker.

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Fraud and broadband holding back e-commerce in SA