E-Commerce Country Case Study - South Africa

E-COMMERCE COUNTRY CASE STUDY - SOUTH AFRICA

CHAPTER 1: SCALE AND NATURE OF E-COMMERCE IN SOUTH AFRICA

Challenges:

• The growth of e-commerce raises a number of challenges, this includes the need to protect the privacy and security of national data, and the need to regulate and tax transactions taking place across new and virtual channels.
• Due to digital capacity challenges like IT skills, The government will initiate programmers to address these challenges

Opportunities:

• With the rapid growth in online businesses globally and the huge opportunities that e-commerce offer, South African small and medium-sized enterprises (SMEs) could benefit substantially from that, and advertise and sell their products globally.
•  The digitization of government services will also give opportunities to contribute the digitization of public services and therefore grow the market for e-commerce products and services.
• e-commerce gives opportunities to  Africa and South Africa to start impact with more and more products and services are made available This is due to that many companies began offering free global shipping.
• The digital transformation of the public sector and the promotion of digital services’ uptake will create further opportunities for digital entrepreneurship and the introduction of new innovative digital goods and services.
• E-commerce and digital services that are responsive to communities’ needs gives opportunities the potential to promote the uptake of ICTs.
• The government will address inequality in opportunity by facilitating growth in opportunities across the Internet through encourage innovation and enterprise.
• E-commerce has introduced new opportunities for courier and parcel delivery services by extending the reach and efficiency of delivery systems.
• Challenges facing South Africa due to the lack of infrastructure and insufficient public knowledge of e-commerce, lead to continued slow growth in online retail sales in the short term.
• There are opportunities to enhance the adoption of e-commerce in South Africa with growing Internet penetration and improvements in mobile technology, and the development of payment and delivery infrastructure.

CHAPTER 2: THE REGULATION OF E-COMMERCE IN SOUTH AFRICA

Challenges:

• Challenges arising from the growing e-commerce environment requiring resolution included legal jurisdiction, cross-border solicitation, cross-sector demarcations, service fees and codes of conduct.
•  One of the challenges also is that the foreign suppliers are obliged to register for VAT, and this is lower than that which applies to local vendors, and this could be considered as unfair or discriminatory by foreign suppliers.
• One of the challenges is that there is no discriminatory treatment of digital products or any specific requirements for data localization and access to source code
• Challenges in an unreliable power supply.
• Challenges in the lack of skilled personnel.
• Challenges in insufficient usage of ICT on the part of the government.
• Challenges in inadequate transport and basic affordable telecommunication infrastructure, and poverty.
• Data costs in South Africa are among the highest globally, and e-commerce via mobile has been significantly stifled.
• Challenges faced companies by having to cater for a wide range of consumers because of language, cultural and economic barriers, among others.
• Challenges because of reading and writing skills and purchasing power are required in e-commerce, Poor or illiterate citizens may be unable to use e-commerce
• South Africans do not fully trust the secure online payment gateways such as PayU, PayGate and PayFast.
• Further subjective challenges to e-commerce on the consumer side are a lack of trust or familiarity with e-commerce. people still preference for local suppliers and suppliers from within the consumer’s own.
• Further subjective challenges to e-commerce on the consumer side is that the online shoppers regarded delivery times as too long and delivery costs as too high.

Opportunities:

• Challenges facing South Africa is that there is still no single overarching law that prescribes the regulation of e-commerce in South Africa.
• The rise of third-party marketplaces offers a huge opportunity for start-ups that can act as a trusted third party between buyer and seller to handle money.
• E-commerce gives new learning opportunities to improve the teaching of IT-related subjects in the existing formal education system and the new knowledge-based economy in South Africa.

CHAPTER 3: IMPACT ON WOMEN AND POVERTY

Opportunities:

• Accelerate e-commerce opportunities adoption for South African women to increase their income, and provide internships to improve their skills and creating working hubs for women in rural communities.
• There are a number of examples of e-commerce that it gives opportunities for poverty alleviation and the inclusion of women. These examples highlight the need for greater literacy and technical skills, access to the Internet.