SA companies lag in mobile commerce

Cape Town - Few South African businesses are ready for mobile e-commerce despite high adoption levels of handsets in the country, a survey has found.

The wiGroup Fast Company SME Mobile Readiness Survey found that just 35% of companies allowed customers to make purchases on mobile devices. This is a low figure when considering that South Africa has a mobile penetration rate of over 100%, according to other research.

Yet despite this low mobile commerce number, a significant percentage (43%) of businesses sell to customers online in SA.

"Interestingly, 5% more respondents offered e-commerce than m-commerce. That's almost 5% more than those who enable their customers to buy from them using mobile phones," said wiGroup.

Part of the reason that companies are lethargic in moving to mobile payments may be the challenge of building user friendly platforms.

Online appetite

The survey found that 31% of managers have considered how customers can find their business on mobile phones, but at least 14% said that mobile commerce was not a consideration in their business plans.

According to payment platform provider PayGate, their PayBill service allows transacting regardless of whether companies have e-commerce functionality built into their websites.

"PayBill works with our new PCS platform to make accepting credit card payments easy for even the smallest of businesses. It’s a very efficient, cost-effective way to reduce billing time and improve cash flow," said PayGate's head of business development Brendon Williamson.

SA firms have not yet catered to the growing demand for mobile payments. (Duncan Alfreds, Fin24)

Despite the reluctance of some businesses, there is an appetite for online retail in SA.

Currently, the retail market for consumer goods in SA is approximately R800bn, of which less than 2% is online, said online retailer takealot.

The company recently merged kalahari.com as part of a consolidation strategy and will soon shutter the former Naspers-owned brand.

During the 2014 shopping season, online retailers did well. Loot.co.za had an average 62% year on year growth in a number of their general merchandise categories.

Mobile spike

In addition, 40% of Loot's customers over the season came via mobile phones and tablets and revenue from phones jumped 300%.

Juniper Research reports that mobile e-commerce sales amounted to $1.5 trillion in 2013, and is projected to hit over $3.2 trillion by 2017.

In SA, the growth of online payments of virtual products has demonstrated that there is an appetite for online payments that is simple, yet secure to use.

"One part of that is building sites that are easy to use and highly visible to search engines; but an equally important part is making sure that the shopping cart and payment gateway are flexible and robust enough to meet all the client's needs as they grow," said Michael Richards of SiteMeUp Online Marketing.

The wiGroup survey revealed that 41% of businesses have plans to roll out mobile commerce plans, but there were concerns. At 23% cited lack of knowledge about mobile, 12% felt it was relevant to customers; 8% was concerned about high costs.

The survey was carried out with 200 South African SMEs.

- Follow Duncan on Twitter

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