E-commerce in South Africa-Free-Samples -Myassignementhelp.com

Question: Discuss about the Challenges and opportunities for the success and failure of E-commerce in South Africa. Answer: Introduction The small and the medium sized companies in South Africa have been benefitted to large extent through the use of e-commerce. With the introduction of e-commerce, the companies in different sectors were able to compete with each other. With the increasing mobile penetration, secured use of online gateways and the confidence of the consumers, e-commerce has expanded rapidly in South Africa. This paper will highlight the challenges and opportunities for the success and failure of E-commerce in South Africa. There are some major e-commerce players in South Africa and they are in a much advantageous position than the traditional enterprises. Discussion There are many companies in South Africa which are operating online business and they have formed strategic partnerships with some famous brands. This has expanded the business of the companies and it has also helped them to connect with the local consumers and increase the sales. The e-commerce has also provided various other options to the companies such as Pick and Pay which is cost-effective for the stores. Some famous brands of bricks and mortar stores are trying to go online and thus it will be advantageous for the customers as well as the businesses. The most important advantage of e-commerce for the online businesses is that they provide the opportunity of web rooming where the customers can have a glimpse of the product online and then they can decide to purchase it. E-commerce has not only improved the business of B2B or B2C but it has also enhanced C2C interactions. Moreover, E-commerce and the other digital services have also responded to the needs of the community. It ha s helped in transforming the entire South Africa into a digital society and thus providing the citizens digital access so that they can improve their quality of life. The retailers are taking advantage of e-commerce by focusing on the digital channels and thus this will help in increasing the growth. The domestic online merchants can optimize the e-commerce through diversification of the channels and the various distribution models. E-commerce has also helped the domestic markets to expand internationally. The postal service of Africa is also very poor and with the development of e-commerce, the delivery methods have improved and the customers are satisfied with the services. This has provided assistance to the small and micro enterprises of South Africa. The customers of South Africa are also much more aware of the safety and convenience which is associated with online shopping. However, the e- commerce sector of South Africa has also faced major challenges which are associated with logistics. The retailers are also facing problem to come online and this is due to the poor design of the websites. Moreover, the customers also face problem in the payment method because majority of the households do not qualify for credit cards. The consumers must be offered with some other secured payment modes which will be easier for them and they can prefer to purchase the product online. Though many new methods have been launched but they proved unreliable and destroyed the confidence of the customers. The online retailers are also finding difficulty in providing free delivery because the customers of South Africa are cost conscious. The customers do not go for online research but they directly visit the stores to purchase the product because it includes no delivery charges. Moreover, South Africa has also faced challenges in the power supply sector, inefficient use of ICT , inadequate transport and telecommunication infrastructure and the lack of skilled personnel. The complicated process of the delivery system has increased the cost of business and as a result, customers are not willing to purchase online products. The fragmented market of South Africa is also another major challenge which is responsible for the slow growth of E-commerce. This has affected the economics of scale and the efficient allocation of capital among the various sectors. It can also be said that the lack of trust among the customers is the main factor which is responsible for the failure of e-commerce in South Africa. Conclusion Thus, it can be said that the people of South Africa must try to remove the subjective obstacles of e-commerce such as lack of trust or familiarity. The government must introduce various accreditation agencies which will increase the trustworthiness and safety of online business transactions. This will help the e-commerce industry to penetrate into the African economy in a short span of time. The demand and the supply side constraints must be removed and the companies must be provided with financial and capacity support. There must also be a provision of formal agreements between the suppliers and the consumers and thus it will be easier to facilitate trade.