In this edition of Business Day Spotlight, we’re looking Black Friday, its value, place in the market and how seriously people should take it. 

Host Mudiwa Gavaza is joined by Avinesh Reddy, chief technology officer at Rentoza, a subscription based e-commerce platform in SA. 

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The discussion begins with Reddy explaining how Rentoza works. He then gives some history around the concept of Black Friday and how SA compares to other parts of the world such as the US and Asia, where occasions such as Singles Day have become very lucrative. 

Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI.
Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI.

Reddy joins us from London, where he says Black Friday has taken on much bigger significance recently, driven in part by high levels of e-commerce use in the country. 

He says Black Friday is good on the whole, especially when it comes delivering value to consumers.

That said, Reddy warns that it may have downsides for consumers and businesses. Customers need to be aware whether or not the items on offer are actually being discounted. Taking time to research will ensure that consumers don’t end up being taken advantage of by unscrupulous businesses. 

At the same time, Black Friday has some risks for a business such as Rentoza. Reddy says they usually have about 10,000 visitors to their site on a normal day but during Black Friday and Cyber Monday, this tends to go up to 100,000, putting strain on computer systems and increasing security risks, given the greater traffic volumes. 

Covid-19 and its accompanying lockdowns have done much to increase e-commerce adoption in SA. Estimates are that this segment will reach 5% of total retail in SA by the end of 2020, up from 1.4% in 2019. This pales in comparison to the UK where e-commerce is expected to reach 40% of total retail

Reddy says for SA to catch up to developed countries on this front, there needs to be more competition in terms of last mile delivery services, connecting businesses and consumers, especially small to medium operators. Second, South Africans actually need to have means by which to make payments online. Despite three quarters of people in SA having access to banking services, many people’s bank cards are not enabled to make payment online, Reddy says.

The discussion touches on Rentoza’s business model, how Black Friday has been implemented in SA compared to other parts of the world, the dangers of participating, ways in which consumers and businesses can be better informed or protected, the state of e-commerce in SA and what it will take to increase adoption locally.  

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 Business Day Spotlight is a MultimediaLIVE production.

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