Most South African business leaders polled in a new survey believe that e-commerce is growing so quickly their organisations are struggling to adapt.
This is according to a new study by Accenture, which found than 19 in 20 South African leaders (95%, versus 83% globally) hold this view, and that they worry about falling behind amid rapid change.
Worse, the cost of doing business is increasing as companies struggle with legacy technologies, a lack of skills and poor infrastructure, the Accenture study found. This is as global players "with a wealth of know-how" enter the market.
"The influx of best-in-class global players into the South African market is reshaping industry dynamics, posing a challenge for local companies across the board," Accenture said on Thursday. (US e-commerce giant Amazon , for example, this week launched online retail marketplace operations in South Africa.)
Accenture's report comes in the same week that new research from World Wide Worx showed that South Africans are finally embracing e-commerce in a big way , with sales reaching R71-billion in 2023, or 6% of total retail sales in the country.
That represents 29% growth from the R55-billion in 2022. World Wide Worx CEO Arthur Goldstuck said he expects that at the current rate of growth, online shopping will top 10% of total retail sales by next year.
"When that level was reached in more mature markets, it resulted in more investment and a massive boost for the sector, which then fed further growth in the years that followed," Goldstuck said.
Long gone"The days when e-commerce was simple are long gone - if they ever actually existed," said Mushambi Mutuma, sales and commerce lead for Accenture Africa in a statement. "The reality today is that e-commerce is complex, dynamic, disruptive and competitive."
For its research, Accenture surveyed 1 300 C-suite leaders and decision makers in 12 industries in 16 countries. Seventy-five of these companies were based in South Africa.
Almost all South African executives surveyed said they've made the right investments in e-commerce.
"These executives' strong confidence surprised us," said Mutuma. "It may reflect that they assess their e-commerce business channel by channel rather than as an integrated capability that needs ongoing reinvention. It is also possible that the high level of confidence emanates from the short-term gains accrued lately at the expense of a long-term strategy."
Accenture's global study revealed three distinct groups of companies: champions, coasters and compromisers, said Sheetal Patel, retail lead for Accenture Africa.
"The analysis compared companies' performance across seven non-financial e-commerce outcomes: e-commerce experience, business partner and vendor experience, conversion rates, customer satisfaction, Net Promoter Score, competitiveness with digital disruptors, and competitiveness with industry peers."
- Topping the list but making up just 20% of respondents were champions. Champions are doing it right, taking a "life-centric and innovative approach to their e-commerce strategies, achieving 85% more revenue growth and 31% more profitability than their peers.
- Coasters (about 55%) are getting by on business as usual. Although some are finding limited success getting to know their customers as people, change is slow thanks to leadership, cultural and organisational resistance.
- Compromisers (25%) are pouring money into e-commerce without achieving positive outcomes. They operate reactively, out of touch with customers' lives and hampered by their own organisational structures, Accenture said. (c) 2024 NewsCentral Media
