E-commerce - Cape Peninsula University of Technology

Chapter 2: Literature review Page 23
expected to grow by only 25% in 2004. A total of R341-million in e-retail
sales was achieved in 2003 - a mere 0.14% of the total retail market in South
Africa.
The South African Department of Trade and Industry report (2000) states that
one of the most frequently asked questions in e-retail strategy is, "What sells
online?" The report found that products with a high content element, and
those that have relatively standard sizes, are the most obvious Internet selling
lines. These include: books, music CDs, DVDs and videos and the first of
these features prominently among the dominant e-retail categories in South
Africa. According to the South African Department of Trade and Industry
report (2000), the leading categories, or what may be called the Big Three of
e-retail, were: food, beverages, groceries, apparel, books, stationery. This is
in contrast to the USA, where apparel is at the top of the table. The reason
for this is historic. The USA has a century-old tradition of purchasing clothing
via mail order, and it is mail order categories that translate best into Internet
sales. Books, music and videos have long been a staple of mail order in
South Africa, and these translated strongly into Internet sales.
As a result, many prospective e-retailers have been given undue reason for
optimism in the spending habits of South African e-customers. Often,
however, it is simply a case of misunderstanding statistics. When, for
instance, one website announced several years ago that it was halting
Internet sales, a message on its website reflected bitterly on the fact that the
company had been led to believe there were 1,B-million Internet users in
South Africa. The reality, they had discovered, was that only 70 000 of those
were actively purchasing from the Internet (South African Department of
Trade and Industry report, 2000). There is a need for retailers moving to e­
retailing to understand its impact on business strategy.