According to the report, ecommerce has the potential to create jobs across a multitude of sectors, while reducing inequality by bringing convenience, lower pricing and variety to more people.
Obviously, that all sounds great in theory, but how does it all work in practice?
The Low-Down on Ecommerce
Put simply, “ecommerce" or "electronic commerce" is the trading of goods or services via the internet – be it by using a laptop to access a website or via an app on your smartphone.
It’s not a new concept in South Africa. Far from it. In fact, if you're reading this blog post, you’ve probably bought or ordered something online at some point.
Essentially, it's shopping online from the comfort of your own home or office, or simply browsing for some new threads while travelling in a taxi. We typically associate ecommerce with online shopping in its purest form: exchanging money for physical goods.
For the most part, the transaction happens entirely online. In some instances, the transaction begins online but is fulfilled in person – think Checkers Sixty60. Or, even, no physical goods change hands at all, like when hiring someone to stand in a queue to renew your car license.
Did you know South Africa’s ecommerce market is currently estimated at R200 billion per year?
How Can Ecommerce Help Combat Unemployment?
You’d expect the obvious answer to be “Set up an online store and start selling” right?
Yes and no. There’s a lot more to the ecommerce gambit than meets the eye.
Establishing a successful ecommerce business in the traditional sense doesn’t happen overnight. Sure, there are a number of unbelievable success stories, but for the most part, online success takes a great deal of time, trial, error, money and expertise.
However, once those orders start to flood in, there are a lot of moving parts that are often overlooked from a consumer's point of view, like what happens behind the scenes (or screens in this case).
Finding the right product to sell, getting it sold and getting it delivered are all business functions that need to be overcome. These functions are often undertaken by third-party partners who aren’t directly involved with the online business itself but are core to its inherent success. And therein lies a world of new opportunity.
Understanding the Ecommerce Ecosystem
A successful ecommerce business isn’t simply a website or online store. It is a complex ecosystem made up of many interlinking services such as marketing, logistics and warehousing.
Think about the process of ordering a pizza online:
You visit a website, view a menu, make a selection, enter your delivery address and pay.
After a while, a scooter arrives at your door and you enjoy a steaming hot stuffed crust.
Now let’s break that down.
1. The website you visited initially needed to be built and continuously maintained. In the background, a marketing company publishing an ad on Facebook might also be the reason you ordered that pizza in the first place.
2. Once the order is placed and paid for, a monetary transaction needs to happen. This could happen online via a payment gateway, or in person via a portable card machine.
3. In the kitchen, a cook has successfully earned his or her daily wage.
4. A delivery person arrives at your door. They could be hired by the pizza vendor directly or be a private contractor.
In only 4 simple steps, that online transaction has benefited a business owner, a web developer, a digital marketer, a cook, a payment intermediary and a delivery person. Each of these represents a job opportunity created by an online business.
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It’s All About Filling Gaps You Didn’t Know Existed
While conjuring up the next multi-million rand online pizza franchise might be a stretch, it serves to provide an understanding of the greater opportunities created by a single online business.
Here are a few thought starters to guide you:
- Could you change the landscape to make everyday chores a little bit easier?
- Could an online ordering system using WhatsApp be possible?
- Could you help someone take their product to a greater audience using Facebook Marketplace?
Regardless, if you’re the one with the big online idea, or the one identifying a gap in the market to service that online idea, having a closer look at the online landscape around you could be all that is needed to provide answers.