Cape Town - Vincent Hoogduijn has recently been appointed CEO of Naspers subsidiary Media24’s e-commerce division.
The Dutch-born executive has more than 15 years of extensive international e-commerce experience, including the successful expansion of the Scandinavian Komplett brand. As the international development director of Buyagift.com he also successfully launched and managed two lean startups in Spain and Italy for the brand.
Fin24 talked to Hoogduijn about his view of the e-commerce industry, its challenges, trends and opportunities.
Naspers' CEO Bob van Dijk is also Dutch, is your appointment a sign of a “Dutch invasion”?
This is obviously a pure coincidence. I do think the typical Dutch way of pragmatic business thinking fits very well in the Naspers environment, but there are lots of different people with different backgrounds who fit that profile.
What makes you excited about your new position?
The online growth potential in SA.
It’s much more about creating a market than growing market share, which is relatively new to me. The potential in SA is immense, but there are reasons or barriers why this hasn’t been yet tapped into successfully. It excites me to work hard to overcome these barriers.
What are the challenges for e-commerce at the moment – in general and for Media24?
In SA, the challenge is mostly around increasing the convenience level to buy online. In a market where retail is very well developed - SA has 32 malls per million inhabitants, ranking it in the top three worldwide - there is no massive urgency to buy online.
Improvements in broadband penetration, cost of data, payment and delivery infrastructure and product offerings should help to raise that convenience level.
But retailers themselves also play a large role in making online shopping more convenient: They need to go online as that is where their customers are to be found more and more often, predominantly on mobile. And they need to embrace e-commerce as an extension of their offline footprint, improving the overall shopping experience, and not so much look at it as cannibalising their stores’ performance.
What are trends in e-commerce at the moment and what would Media24’s way forward be?
Mobile is becoming more and more important. Google recently reported that now more than 50% of their worldwide search traffic comes from mobile, which is immense.
We also see a large increase in shopping apps, where some companies (like Myntra from India) have completely switched off their e-commerce site and moved to app only.
Next to this, we see an increase in market place models: Agile and tech-driven businesses that can prove to scale much quicker and aren’t asset heavy. Last but not least, as mentioned, the payment and delivery infrastructure for e-commerce will see strong improvements in the near future.
There have been some selling-off of certain e-commerce assets and acquisitions of others by Naspers recently – can you put that into perspective?
E-commerce is a dynamic industry and, to a certain extent, maturing as well. This is where you see consolidation happening. You need to be in a leading position either by organic growth or by acquisition and some tough choices need to be made at times to accomplish that.
This is not only a Naspers philosophy, but a worldwide phenomenon within e-commerce. One of the reasons why Naspers is so successful is due to making these tough choices.
What would you say are the strong points of Media24's e-commerce division?
We have a very talented and diverse group of people with different backgrounds (media, retail and e-commerce) enabling us to approach the market from different angles. Our competitive advantage is our access to market. Media24 has a very powerful media muscle: Approximately 70% of the SA population touches upon one of our products on a weekly basis, which is immense and can make or break new businesses.
Which countries are/will this division be focusing on and which areas of e-commerce?
Predominantly South Africa: This country has enough potential to keep us busy for the next few years. However, if we see that a concept works very well, we may consider introducing it to other (developing) countries as well.
Media24 is focusing solely on fashion when it comes to online retail. Next to this, we are mostly looking at services platform models and not so much online retail. With Takealot as general merchandise, OLX as market place and Spree as fashion vertical, the remainder of the market is small and fragmented, making it difficult to start something new and scale quickly in that area.
Ultimately, consumers expect to interact through different channels making it impossible for brick and mortar players to ignore this.
E-commerce growth will increase that urgency, but currently online retail is only around 1% of total retail in SA. It is 9% worldwide and a staggering 16% in the UK, topping the charts.
Ultimately, I don’t think there’s no space for pure players (either online or offline) and that hybrid models will shape the future. But that future is not very near, as pure players are still thriving well in the UK.
How will the e-commerce division leverage (or not) other assets in Naspers/Media24?
The marketing muscle in Media24 is very powerful and this exposure can be leveraged to any online property. The fact that Spree has seen massive growth in its first two years is a direct result of that muscle. We have access to different audiences with different preferences and we can shape our future (digital) properties to these audiences.
We focus on triple digit growth and we won’t settle for less.
* Fin24 is part of Media24