Running a lean business and having people with multiple skill sets are two key factors to running an ecommerce company in South Africa.

This is according to PriceCheck CEO Kevin Tucker, who spoke to MyBroadband about the online retail sector in South Africa.

Tucker speaks from experience, having founded PriceCheck in 2006, sold it to Naspers in 2010, and then bought it back in 2015.

“When we took over the business again, we came in with a different mindset. We didn’t have unlimited resources, we had limited funding, which meant we had to be quite resourceful in how we went about growing the business,” said Tucker.

“We focused on driving our revenue generation. While improving our revenue, we also brought in a sales team to focus on increasing our merchants, as well as dedicated account managers who focused on improving the service offerings.”

Running lean

Tucker said it is important for any business operation to be lean, as “there is no point in wasting resources or anyone’s time”.

Many tasks can also be done digitally, which would have taken several people to do previously.

“I think it’s important to have people in your team that have knowledge across multiple skills sets,” added Tucker.

“Another way to save money is to do things yourself, whether you’re starting up, or going through a downswing. When I took over the business, I was managing the marketing, the HR, and some of the accounts.”

His comments come after South Africa’s dominant ecommerce player Takealot has received multiple rounds of funding from Naspers – including R960 million in 2017 – to grow its operations.

Tucker said for online players to get scale, they need to identify their markets early on and make sure the addressable audience is big enough for their business.

“You can do that either by creating a business that spreads through customer loyalty and word of mouth, or by spending money on marketing.”

“If you want to grow a business that spreads organically, you need to put a lot of thought into the product that you’re offering. You need to make sure that you are not competing against big players that can operate at larger scales than you,” he said.

Tucker said the next step is to then become profitable, which requires companies to pay attention to their margins.

“Make sure your profit margins are good enough for you to start making money immediately. Keep your costs low, operate in a lean environment, and make sure you watch your costs monthly. It’s very easy to get distracted and spend money when you see your business growing, but it’s very important that as you grow, you also keep a handle on costs.”

If this is in place, ecommerce companies can then tackle the other big challenge they face in South Africa – traditional retailers.

“South African retailers need to replicate the retail experience that happens in-store, online. I think that’s the biggest challenge,” said Tucker.

“South Africans are very happy shopping in stores, and I think online retail stores have a long way to go to replicate that shopping experience.”

https://mybroadband.co.za/news/technology/265313-what-it-takes-to-make-an-ecommerce-company-work-in-south-africa.html