Johannesburg, 31 October 2022 – The growth of ecommerce in South Africa’s townships is astounding.
The 2022 South African Township CX Report, which surveyed more than 1 400 townships residents, found that in the space of a year online purchases grew by a staggering 42%, from 28% in 2021 to 70% this year.
Given their love of technology and the internet, it stands to reason that millennials and the Gen Z generation are clicking more to shop online. As the report notes, “the younger the audience, the higher the propensity is for online purchases”.
Township shoppers favour fashion, mobile data and food, and with Black Friday coming up, it can be expected that even more people will be looking for great deals ahead of Christmas.
But as much as ecommerce is on the rise in townships, it’s also important to understand it’s not all plain sailing.
Retailers looking to break into these markets will find that cash is still king, and there remains a lot of scepticism around online transactions.
For another thing, while telecommunications companies are turning to WhatsApp to provide payment alternatives, many residents still don’t have smartphones that support mobile payments.
Deliveries to consumers present another challenge. Often courier companies are reluctant to enter areas identified as crime hotspots, and even if they do, there can be the problem of inefficiencies in geo-location apps that might not pick up specific addresses.
Effective delivery can’t be emphasised enough.
A study published in August, “Online shopping behavior and service quality perceptions of young people in South Africa: A Covid-19 perspective”, says young shoppers consider delivery costs, time waiting for a delivery and order accuracy as the most important factors in selecting an online store.
There are ways for township challenges to be overcome, however, thanks to huge advancements in technology. Here are just a few to consider ahead of Black Friday:
Click & collect
Pargo is a smart logistics platform that simplifies online delivery through its tech-enabled network of Pargo access points, to serve as an official pickup point. With Pargo’s Click & Collect offering, there’s no need to wait for couriers or deal with the uncertainty of when a delivery will take place; you can simply collect from a pickup point when you’re ready.
It’s important to remember that residents may have saved up precious rands for months to make a purchase online. That should be respected and they should always be reassured their parcels are on the way. This can be done through real-time driver tracking and automating delivery status changes.
Research the area
If there are crime hotspots, know where they are. This also applies to areas which most people consider safe. The old adage of “location, location, location” is just as important in the townships as it is elsewhere. If many orders come in for Black Friday, select a click & collect pickup point that is easily accessible to all.
Free delivery is a massive drawcard, especially in townships where money is tight. It’s a no-brainer that if your delivery is free and your competitor’s is not, the customer will choose you.
Social’s where it’s at
Selling on social media platforms like Facebook and Instagram is big business. It’s cheap and anyone can do it, and with almost everyone now on social media, it represents the perfect chance to reach out to township residents. SellOnSocial by TymeBank, a customised end-to-end e-commerce tool that allows small businesses to manage the sales journey from order to delivery across multiple social media platforms, is definitely worth looking into.
Pargo is a Cape Town-based tech company that solves the challenges of last-mile logistics through its smart logistics platform and fulfilment solutions, which are anchored by a vast, nationwide network of thousands of Pargo Pickup Points. Pioneering Click & Collect back in 2015, Pargo continues to develop their technology and processes to make fulfilment solutions fit for the African logistics landscape, including Home Delivery, Returns and micro-warehousing. Clients that use their tech include Edgars, rain, TFG, Cape Union Mart, Clicks and HomeChoice.
Lars Veul is the CEO and co-founder of Pargo, a smart logistics platform that simplifies online delivery through its tech-enabled network of Pargo access points. Prior to starting Pargo, Lars was part of the founding team at Groupon, where he headed up the online marketplace, which exposed him to the challenges of online delivery. He is also an Alibaba eFounders fellow and is part of Endeavor.