Three South African digital forces have on Wednesday announced an innovative partnership that will see the creation of an online marketplace to help small to medium enterprises (SMMEs) access the rapidly growing digital retail sector in Africa.
The triumvirate consists of ICT Investment Company Ayo Technology Solutions (AYO) through a subsidiary, with South African online retail platform Loot.co.za (Loot) and integrated digital services agency Volt.Africa (Volt).
Announcing the venture, the companies said there was a desperate need to build the entrepreneurial baseline in South Africa to redress the country’s shrinking economy, and that going digital was one key solution that should be easy to implement.
This has not always been the case, the companies say, as the entry cost for individuals and small businesses to create a presence, trade online and be successful, is a barrier to entry.
Addressing this barrier to entry, and the lack of skilled resources SMMEs often have, AYO, Loot and Volt will now combine their significant skills, create efficiencies and opportunities, which will allow these businesses to have a one stop shop to penetrate the online retail market in the consumer sector.
More than that, the SMMEs will also gain access to a support structure from each of the companies, to help them maintain and grow their businesses.
Greg Le Roux, Loot chief executive said: “South Africa’s long-term economic growth will more than likely come from the entrepreneurial and SMME sector.
“With access to the right platforms, markets and tools, today’s small business could well be tomorrow’s super store and we aim to be their economic architect of choice.”
While online marketplaces in South Africa represent only 2% to 3% globally, figures show that upwards of 17% of retail transactions are conducted online.
Consequently, as connectivity continues to be rolled out across South Africa and the continent as a whole, it is expected there will be a correlation in the number of consumers and businesses in the region transitioning to buying and selling online.
Amazon and Alibaba generate 70% of their revenue from online marketplaces and not from B2C (business to consumer). Howard Plaatjes, AYO chief executive explained the business case for the partnership.
“It makes complete commercial sense for AYO and our associates to develop and implement an online marketplace that is specifically aimed at helping SMMEs grow.
“It contributes not only to the companies’ own upward trajectory but also enables sustainable contributions to the national fiscus. It is a win-win for all and we look forward to realising its potential,” he said.
The new online marketplace will have a home on the Loot retail platform from which qualifying businesses can showcase their products and services to a very broad and diverse consumer base.
The first phase of the marketplace will roll-out in conjunction with the Black Business Chamber (BBC).
The marketplace will give these businesses the ability to scale and effectively penetrate a scale and effectively penetrate a previously inaccessible market by enabling them to transact directly with consumers through their digital shop window.
“This digital marketplace is an exceptional opportunity for our more than 2,000 business-strong membership to potentially enter the mainstream market and grow.
“Not only that, but this is a call to action for other start-ups to show they can have the support of established digital operators to access a broader market. It inspires business confidence and we wholeheartedly support this,” secretary-general of the BBC, Khaya Cishe, said.