It’s no secret that South Africa’s ecommerce is on the verge of booming. With the industry said to be growing by 30% a year and the market estimated to be worth R4.4-billion in 2013, we can expect a lot of competition in this arena.
The almost year-old Shopstar is one of those competitors — an ecommerce platform with a local twist that’s designed to allow anyone to create and manage their own online shop with minimal effort. Developed in Cape Town, it’s a homegrown solution for South Africa’s unique ecommerce requirements.
After spending some time in Europe (the best ideas are often cooked up abroad), Shopstar Founder Jens Herf said he realised that there was a massive gap in South Africa in need of filling. Referring to online shops abroad, Herf said that “ecommerce has allowed them to streamline their operations and make more sales, which in turn allows them to employ more people”.
Though there are hefty competitors abroad, as well as locally — such as This Army, eShop, WooCommerce, Bigcommerce and Shopify – Shopstar hopes that by focusing on all layers of ecommerce operations (not just web-hosting) it will stand out from the rest.
“Shopstar is local — this means it is developed by people who not only understand technology but also the South African market place. Our clients can contact us and they know they are dealing with a South African company,” explains Herf. “We also believe in collaboration and work closely with our clients to develop new features.”
The company has formed a relationship with significant logistics groups such as DPD Laser in order to find ways of simplifying the delivery processes. It also holds events for its clients every four to six weeks, where industry specialists are present. These presentations range from logistics, marketing, social media, legal matters, photography, and so forth.
Founded in June 2013 and funded by web development company, JGH Internet PTY LTD, Herf says that Shopstar is working on raising capital, but has not finalised amounts or agreements yet. For the time being, Shopstar is funded through other development work.
In terms of growth, Shopstar relies on monthly registration fees from its clients, which include packages ranging between as little as R200 (US$20) to R1000 (US$100) per month. The prices range according to the amount of stock that’s needed to be stored.
Some of the features clients will receive include a unique PoS, which means that staff can ring up sales in store or at other markets, and the ability for owners to customise their shops and add their own domain to match their brand requirements. Furthermore, shop owners can also create vouchers and set their own specials.
The platform is currently responsible for hosting online shops such as Haas, Cinderwood, Matblac, Super by Retro Future and Dear Rae. Most of these sites reflect the local industry’s niche designer market.
Dear Rae, for instance, focuses on bringing locally hand-crafted jewellery to the rest of the world. According to founder Karin Rae Matthee, “Since the launch of our online shop the sales at Dear Rae Jewellery have doubled. We have had orders from South Africa, USA, Hungary, Switzerland, Russia and Belgium.”
“We have between three and eight new potential shops registering a day. This is great, but our business model requires a critical mass to become self sufficient.” By the end of 2013 Shopstar had more than 300 registered shops, with an overall turnover exceeding US$70,000.
Much of South Africa’s ecommerce success could be attributed to the enablers of the industry — the companies actually putting shops online. Similar to Shopstar, WooCommerce is one such example. Launched in 2012, the South African based startup managed more than 1 million downloads within the first two years, with an average revenue growth of 38% per month.
South African ecommerce is unique in that it promotes products of extremely high quality that are generally far less expensive abroad. Add to that the emerging local middle class as well as rising internet penetration, and you have yourself a party. ”I believe that ecommerce can put South African and African products on the international map and create much needed jobs,” adds Herf.
If we consider these figures and trends, chances are we’ll be hearing of Shopstar again in the near future.
This post by Jacques Coetzee was first published by VentureBurn, a TechMoran publishing partner.