Mobile commerce faces uphill climb in SA

 ·26 Sep 2013

Major South African e-commerce players are noting a big increase in the number of people engaging in mobile commerce – but the platform still faces many challenges in terms of accessibility and payment.

Speaking at the 2013 uAfrica eCommerce Conference in Sandton recently, panelists Jaco Jonker (CEO of Bidorbuy), Daniel Guasco (CEO of Groupon SA) and Liz Hillock (Head of Marketing at noted a significant uptake of customers making purchases through mobile means.

Jonker revealed that the Bidorbuy had seen 100% growth year-on-year in terms of mobile traffic to the site, but pointed out that average revenue per user (ARPU) still significantly trailed customers who bought through the web interface.

Jonker added that high-end mobile users were the bigger spenders – with iPhone users spending more money on the site than Android users, despite being fewer in number.

Hillock, speaking to Kalahari’com’s figures, said that, while the e-retailer had noted an increase in mobile users, there was still a significant gap between PC and tablet users, and mobile.

A survey conducted by Kalahari in June 2013, revealed that purchases made by customers accessing the site on tablets had seen “meteoric” growth of 70% year-on-year.

According to Hillock, Kalahari has invested over R1 million on opening and developing its mobile platforms.

Challenges of mobile

The toughest challenges facing online retailers and the mobile drive have mainly to do with accessibility, navigation and payment, according to the panelists.

Currently, smartphones and apps make e-commerce most accessible to mobile users, but this does not speak to users who attempt to access transactions from older devices.

Key to overcoming the challenge is developing platforms that are easily navigated and accessed by a wider set of people – something which is increadibly difficult for retailers who offer a large variety of products.

According to Bidorbuy’s Jonker, offering limited products, or a subset of products isn’t really an option: “It’s like taking short-cuts, offering someone half a product,” he said.

“Rather make sure presentation is uniform and easier, help users filter and search for what they need – Do it properly or don’t do it at all.”

Another issue raised by the panel spoke to payments and payment options.

With transactional security enforced by Visa and MasterCard through mobile means (such as a One-Time PIN or OTP), following through with payments via mobile is extremely challenging, the panel said.

To illustrate the challenge, Jonker asked the 400 delegates attending the conference who remembered their Visa or MasterCard 3D Secure password – a handful raised their hand.

“Let’s just say 3D secure is a big hurdle for mobile commerce,” Jonker said.

Luke McKend, country director for Google South Africa, believes that payment mechanisms in South African commerce – both online, mobile and physical – need to become simpler and entirely digital.

The director pointed to NFC technology as well as digital wallets like Google Wallet and mPesa as a key driver for this change.

“The idea is to replace the card. The key is simplicity, to make sure you’re only carrying one device for all your needs.”

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