E-commerce can be a lockdown lifeline for SMEs
Some small businesses have been able to adapt quickly to the constraints of lockdown by either amending their online strategy or taking up e-commerce for the first time.
Jeremy Lang, regional general manager at Business Partners, said "SMEs are battling and often don't have the financial muscle" to survive a lockdown of this length, but e-commerce has opened a world of opportunity for them.
"Entrepreneurs are who they are because they can change tack" and are able to adjust quickly to changes in the business environment.
Jonathan Smit, managing director of PayFast, said the platform - a payments processing service for South Africans and South African websites - has experienced a 111% increase in business accounts being registered since the announcement of the Covid-19 level 5 lockdown, with payment volumes steadily increasing over April and May.
One newcomer to e-commerce is Green Fish, a fish supplier in Cape Town. Co-founder and CEO Ryan Nienaber said that after the lockdown was announced "my world fell apart".
"We didn't receive one order from the restaurants we supply, some for more than 15 years. Not just that, they couldn't pay. I was sitting on about R100,000 of stock and went from being a stable business to no cash flow."
Nienaber, who needed to pay expenses, had to make a plan. "I got hold of my wife's cousin, who knows about computers, and in three days we went live with a website to sell our fish to consumers," he said.
"We made a bold claim, that we would only deliver fish that was caught less than 24 hours ago and we would get it to the customer on the same day as the order. On day one we were knocked off our feet."
The family-run business did not expect the huge demand for fresh, quality fish.
"Everyone pitched in; my secretary and my sales manager were delivering fish. I even called my mom for help," Nienaber said.
"In the background it was chaos, but on the frontline we were determined that the customers got the best experience. Almost 400 of our customers have written positive reviews on our website."
In six weeks, Green Fish has made more than 1,000 deliveries of an estimated 1.2t of fresh fish "caught the old-fashioned way using handlines", he said.
Another SME that has changed the way its business functions is Conqa. The consulting, event management and leadership development organisation, co-founded by former SuperSport presenter Xola Ntshinga, had to cancel its events and move online.
"We've developed a fully automated online payment portal where business leaders and sports coaches can pay online to access our Conqa Connect seminars," said Ntshinga.
"We have certainly gotten off to a promising start, with almost 400 people logging onto our maiden webinar earlier this month. It's early days yet, but we have established a solid base to work from."
Ntshinga said that when it is possible the business will still look at creating events, "but the long-term plan has to be to integrate this new approach to our business. The two verticals make good bedfellows, but in lieu of certainty we are determined to organically build success in the online space."
Kamers/Makers have also embraced e-commerce. The traditional markets that started in 2003, in a few kamers (rooms) in a house in Stellenbosch, grew to annual shows in Pretoria, Johannesburg, Cape Town, Bloemfontein and Stellenbosch.
Owner Magdel Kemp said they had to shut down their shows and focus on revamping their online shop that was created to support the SMMEs that exhibit and sell hand- crafted items such as baby clothes, ceramics, beauty products and confectionary at their events.
Since the revamp, the business had attracted an additional 60 SMMEs, which had joined the 160 they already had on their online platform.
WhiteFox, an online platform that delivers locally produced meals in the Vaal area and in Soweto, said the lockdown had changed their e-commerce operation.
"The announcement of the national lockdown meant that our Vaal operations would have to close as it was a student-centred market," said WhiteFox CEO Lufuno Monguni. "We changed our model to start working with stores that sold meals that accommodated families."
Warrick Kernes, founder of Insaka eCommerce Academy, said: "The monumental shifts we are seeing around the world as a result of the coronavirus have proved a game-changer for the e-commerce sector.
"With businesses struggling, e-commerce could be the solution for them. In 2018, e-commerce contributed 1.4% to GDP. I expect it to grow to 2% in 2020."
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