COVID-19 and the several months-long national lockdown has seen South Africa and its citizens take multiple hits. The one with the potentially largest impact is that to the economy, with several businesses having to shutter their doors and a vast number of people now unemployed. For those businesses and enterprises still in operation, there is some signs of hope, according to DPO South Africa – ecommerce.
The notion of ecommerce has proved a contentious one to date, with online retailers only being able to operate under certain conditions during lockdown, before lobbying to open up all ecommerce platforms in the country a couple of months ago.
DPO South Africa, which operates the country’s largest online payment platform (PayGate), believes that while the first few months of lockdown have proved difficult, the renewed interest in ecommerce could help steer the nation during its economic strife.
“The last weekend in May saw transactions per minute hit four times that of the busiest minute experienced during Black Friday last year. June was similar to May and we expect our monthly volumes for the rest of the year to settle at around 40 percent higher than last year,” explains Peter Harvey, MD of DPO South Africa.
That said, anyone looking at the transactional numbers in the country, as the BankservAfrica Economic Transaction Index (BETI) does, will see that the country has suffered its sharpest decline in quite some time recently. Specifically a 20 percent drop in transactional value over a three month period (ending 31st May), compared to 2019.
Still, Harvey is of the opinion that with some innovative thinking, ecommerce can provide some much needed respite.
“Although the latest bank transactions numbers paint a grim picture, we believe the ecommerce transactional numbers prove that South Africans are still spending online and, with some innovative thinking, there is certainly room for optimism for local entrepreneurs,” says the MD.
The DPO South Africa executive holds this belief as his organisation has begun to see a shift in thinking with regards to ecommerce, with the informal sector in particular eyeing opportunities.
“Years back all the focus was placed on the formal retail sector. However, we have seen a marked shift. Our partners in the broader payment space have confirmed that the informal sector, including our spaza shops and informal vendors, are fast approaching the same monthly revenues as the formal sector,” he says.
“And, while digital retail currently only accounts for a small percentage of the formal sector’s monthly trade, both the informal and digital sectors are the solid areas of growth opportunity which should be appealing to the savvy entrepreneur,” adds Harvey.
The MD continues by noting that trust will play a pivotal role in how quickly and effectively ecommerce will be adopted locally, which is why the company recently rolled out its own solution.
“We think the launch of 3D Secure 2.0 will make a big difference. It offers a much better user experience coupled with a more secure authentication process, both of which will enhance the shopping experience,” he highlights.
Along with better tools for trust and security, Harvey says the success of specific ecommerce platforms in South Africa will also help drive the shift among retailers to an online solution.
“The past three months has shown us that local consumers are ready to embrace digital business. This increased demand for digital offerings must now be met with a good supply,” notes Harvey.
“We have every confidence that the innovative and entrepreneurial flair of South Africans will shine through in the months to come,” he concludes.[Image – Photo by rupixen.com on Unsplash]