Ecommerce In South Africa - Why It Is Failing!

By Author: Allen Jaffe
Total Articles: 3764
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Consider the last 10 years of E-commerce in South Africa. Literally, not one successful online business has reached the top and made a global impact. E-commerce growth in commercial websites sites has been dismal, and we are yet to see a Cape Town-style Google or a Jo'burg based Amazon.

E-commerce success depends on many factors if it wants to be an online sensation and generate any profit. Why do most South African developed websites struggle to generate a profit? Over 90% of them fail in the first year. What are their shortcomings and where can you implement changes in order to see a healthy profit? Read further to discover how you can affect change in your website with these modern principles for online success.

Perhaps you have heard of the 5 P's. No, it's not some obscure Jazz band, but an acronym for Prior Planning Prevents Poor Performance. This is a key factor to keep in mind. When it comes to online business your product can change in the blink of an eye as demand is governed by the daily search patterns and needs of the customer. Unlike a physical business that must be rebuilt and altered, a websites ...
... image and product changes on the fly to reflect the diverse needs of the consumer.

Always consider the competition. When you first started your website and the initial planning stages started, were you surprised to see how many websites offered the same product? No matter how unique and original an idea is, there is another business performing the same service-so keep an eye on the competition. Know your ‘enemy' and garner valuable information on their shortcomings and successes so you can further improve your areas that need development. Rather focus on the elements of the business that the competition is less interested in or does not focus on at all. For instance, you sell pots online and they sell pots as well but at a cheaper rate. Instead of just selling pots, you could offer custom designed pots for consumers looking for unique kitchenware.

Perhaps you would rather sell the pots at a cheaper rate then the competing websites. Drawing customers in with very low prices is an excellent way to attract a large client base, as customers who mostly shop on the web will always use price comparison websites to find the most attractive deal. However, don't let your guard down. Lower your rates enough to be competitive in regards to the other websites and make sure you can still generate enough profit to maintain your expenses and of course, the costs of marketing. Make sure that you offer what few businesses do not, that is the USP - the Unique Selling Point. A unique and interesting product usually guarantees returns on your investment.

How does one generate traffic though, how does your website become number one in the top search engines? By using both SEO and PPC. SEO is search engine optimization, a process that search engines use to identify keywords in websites, and then rank them according to keywords usage. Pay Per click only works when a user actually clicks on an ad to visit your website. Advertisers bid on keywords that predict target markets. When a user types a keyword query matching the websites keyword list, or views a page with relevant content, the website may be listed.

The final helpful hint for today is Conversion rate. Your websites effectiveness is directly linked to how many unique users are accessing said website and purchasing your product. There is a formula for working this out but a simple example would be for every 100 unique users, you would need two users purchasing your product. This gives a desired conversion rate of 2%. The average rate is less than 1%; this is well below the global standard of 2.4%. However, as the market for online shopping grows in SA, so will eventually our conversion rate. So refine your sites conversion rate and you will increase your revenue in leaps and bounds. If you follow these steps we have outlined, then there should be no limit to the success of your online business.