Behind the e-commerce boom, and how to embrace the online sales wave

If online is the new meeting place, then e-commerce is the new marketplace.

In the fifth and final podcast of Behind the Business Headlines, broadcaster Peter Ndoro chats to business banking expert Herman de Kock about all things e-commerce; what key lifestyle trends are riding this wave; and how businesses can embrace a future hybrid sales model.

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After 18 months of global Covid-19 lockdowns, data and research are proving that the way the world prefers to shop has changed, with mobile e-commerce growing at a rate of 12.2% over the past year in the US alone.

Locally, research from Visa South Africa shows that 48% of people now prefer contactless payment methods, while McKinsey research suggests 60% of South Africans did not return to their pre-Covid-19, out-of-home buying behaviour after the first lockdown restrictions were lifted.

Among the talking points Herman and Peter dive deeper into include:

the importance of data and contactless payments in the e-commerce boom;

notable e-commerce growth in the lifestyle, athleisure and food sectors;

the benefits of signing up for a curated e-commerce platform;

and the opportunities posed by a hybrid sales model, among others.

Herman is the Executive Head of Business Banking, Sales and Services at Nedbank, and his specialised finance team are experts at advising clients about e-commerce opportunities.

"If I were to stress a point, it is the need to pivot a business model to remain relevant to a customer base that is clearly showing changes in the way they want to engage with your business. Digitisation plays a role in this context and requires the right solutions with regards to e-commerce, contactless payments, and very importantly, data," says de Kock.

With online activity soaring and e-commerce transactions growing year-on-year, this also poses an increased risk to the consumer around cybercrime too.

At the peak of the first lockdown in April 2020, the FBI reported a 300% increase in cybercrime incidents. The latest estimate is that cybercrime is now costing the global economy more than US$1 trillion, up 50% from 2019 levels.

"We have to understand that with the good there is also the bad. There is a surge in the cyber attack trend, and it’s important that as consumers we’re very much aware of what to look out for from phishing or vishing or other online scams. All the banks in South Africa have programmes and communication to consumers on how to make sure you do not fall victim to any cyberattack attempts."

Hybrid sales model and the future

With forecasts predicting that mobile e-commerce sales alone will grow to $270 billion by 2025, businesses are tasked with the challenge of pivoting their operations towards a hybrid model that aligns their value chains for both physical and e-commerce trading going forward.

"The trends indicate that we’re going to see a hybrid model in the marketplace. There will always be on-site shopping - visiting a shop to purchase goods where there will be an increase in contactless payment methods - but the offsite shopping behaviour, in other words online shopping, we will see growing."

Nedbank has a variety of solutions in this area that can assist business owners to capitalise on these opportunities.

Nedbank's super app Avo is a curated e-commerce platform that enables merchants to quickly and efficiently access a built-in marketplace of more than 450 000 new customers with relatively low investment. Bespoke businesses can sign up and open their products up to new customers in new geographies.

Similarly, Nedbank Enterprise is a system that can be fully integrated into a merchant’s e-commerce website, eliminating the requirement to redirect customers to another site to make payments. By eliminating the need to redirect customers to another site, this greatly improves user experience at the point of checkout with bank-grade protection and security.

Herman and his team have many more insights on the e-commerce boom, including the benefits of contactless payment methods, the major lifestyle shopping trends and more.

Listen to the full episode on e-commerce below for more from Behind the Business Headlines: the series that asks the experts the questions your business needs to know.

Behind the Business Headlines Podcast | E-commerce

To find out more about Nedbank's business banking products, visit here for more.