South Africa’s ecommerce and courier services

Online shopping in South Africa is growing in popularity , with more consumers making online purchases via ecommerce websites.

Online retail revenue in SA has grown by more than R3.9 billion – or 100% – since 2010 , according to research by World Wide Worx.

Online shopping portal Spree, for example, achieved a 338% increase in shopping orders over the 2014 festive season, and a 180% year-on-year increase in online sales.

Ecommerce warehousing and order fulfilment service provider Parcelninja said that while it has developed modern systems to cope with load in their warehouses, external factors were still a challenge.

Parcelninja’s co-founder Justin Drennan explained that the Black Friday sale on 28 November 2014 tested all online retailers’ systems.

“We saw an increase of 600% in sales on Black Friday,” said Drennan. “We shipped in excess of 8,000 products over this period.”

Many local websites, including Takealot, Superbalist, and Kalahari buckled under the load of Black Friday traffic.

Drennan said that Parcelninja was able to scale during this period because of their technology and automation. “We are built to grow or shrink with volumes,” he said.

However, their biggest challenge during this period was delivery. “Couriers could not handle volume, and there were challenges which we are going to address in 2015,” he said.

Drennan added that last year’s Christmas sales also posed a problem for courier companies.

The World Wide Worx research showed that 37.5% of shoppers choose a retailer based on how quickly they can deliver a product – which means late deliveries could potentially cost retailers repeat business.

Drennan agreed, saying that consumers expect next-day delivery, which will put additional pressure on systems to support fast delivery.

Drennan said he expects a 500% increase in Black Friday online shopping volumes in 2015 compared to last year.

Despite this growth, online sales in South Africa only make up a small percentage of total retail sales – but this is set to change.

For this transition to happen, though, courier services infrastructure of local online shopping must improve.

This increase in sales will test South Africa’s ecommerce and courier services, and will undoubtedly highlight deficiencies which may exist in these systems.

Source

Last modified onMonday, 26 January 2015 12:12

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