Callyn Naidoo

Ecommerce

Assignment
Contents
Question One:.......................................................................................................................................3
1.1......................................................................................................................................................3
Current Market Trends......................................................................................................................3
Cross-Border E-Commerce............................................................................................................3
Online Payment............................................................................................................................3
Mobile E-Commerce.....................................................................................................................3
1.2......................................................................................................................................................4
1.3......................................................................................................................................................4
1.4......................................................................................................................................................5
Online security services can protect your credit................................................................................5
Online security services can get your stolen money back.................................................................6
Online security services can protect your identity.............................................................................6
Online security services can help regain your identity faster............................................................6
Question Two:.......................................................................................................................................7
1.1......................................................................................................................................................7
1.2......................................................................................................................................................7
1.3......................................................................................................................................................7
1.4......................................................................................................................................................8
Limited Risk.....................................................................................................................................10
Bibliography.........................................................................................................................................11
Question One:

1.1

E-Commerce is making steady progress in the South African retail environment, especially in
far-flung areas where traditional distribution channels are too costly. Traditional retailers
have almost all taken on a web-presence to compete with mail-order companies; many
outsource delivery to a service provider. South African online spend forecast projected
annual growth rate of 15% through 2021. This accounts for 1% of the country’s retail sector
as a whole and indicates immense potential for growth and opportunity.  Internet user
penetration is at 47% and expected to reach 60% by 2021 and mobile penetration is 65%
and growing. In South Africa, generally B2B customers are also B2C customers, so interaction
is generally the same. Both have become accustomed to performing consumer product
research online.  As a result both types of customers are using consumer and B2B websites
to purchase products and services for their companies or as individuals.

Current Market Trends

The top e-Commerce product category in South Africa is media products, including books,
CDs, DVDs, and games.  Consumers are also price conscious, favoring online promotions and
coupons.  South Africans are spending more time online researching better prices and
seeking product recommendations on social media.  

Cross-Border E-Commerce

South Africans purchase mostly from South African websites, but 27% purchase from the
United States, and 14% from Europe. The U.S. version of Amazon.com is the third most
visited e-commerce website in South Africa.

Online Payment

Credit card and debit cards are the most preferred payment methods. Consumers also use e-
wallet services for online payment. Due to the growth of credit card fraud, the Payment
Association of South Africa mandated the use of 3D Secure in 2014. Merchants have
reported that increased flexibility in the application of 3D Secure to online transactions in
recent years has reduced cart abandonment by consumers.   

Mobile E-Commerce

Cell phones have largely replaced wallets, as banks, card operators, retailers and
communications companies provide alternatives to cash as a means of payment.  M-
commerce, where cell phones are used to pay for goods and services, has advanced beyond
mobile banking to debit and credit transactions.  M-commerce is particularly attractive in
South Africa due to the rapid increase in the number of cell phones, limited access to the
Internet, and poor fixed-line infrastructure. This provides an immense opportunity for online
retailers, as mobile spend is projected to increase by 123% by 2018

Digital Marketing

Social media platforms are becoming more pervasive as marketing tools in South Africa.
More than 90% of South African major brands advertise on social media platforms. On a
consumer level, growth for most networks has slowed down, but engagement by users has
intensified.[ CITATION UsE19 \l 7177 ]

1.2
With high rates of mobile penetration in South Africa, online shoppers are increasingly
opting to make purchases on their mobile devices – resulting in an estimated 65% growth in
online spend via mobile device (smartphone or tablet) between 2015 and 2016, to reach an
estimated R9.5bn, with momentum expected to continue. This provides an immense
opportunity for online retailers, as mobile spend is projected to increase by 123% by 2018.
In the last 12 months, 43% of cross-border shoppers stated that they shopped cross-border
via smartphone while 21% stated they used a tablet for their cross-border purchases. Major
shipping and transportation logistics companies are getting more sophisticated with the use
of their resources. Driven by the need to meet increased demand for a high volume of e-
commerce deliveries, every truck on the road and plane in the sky becomes critical. Every
inch of unused or misused space in a cargo era creates a ripple of cost and inefficiency
across the supply chain; so they need to make sure they can fit as many packages as possible
into each and every load.[ CITATION Gra18 \l 7177 ]

1.3

Male-headed households spend more on shoes and clothes, R5,343 a year, compared to
female-headed homes, which spend only R4,364 on shoes and clothes a year. This is one of
the findings from Statistics South Africa’s Living Conditions Survey (LCS), released at the end
of January.

Data was collected over a year, from October 2014 to 2015.

Stats SA says the finding is not unexpected.

“Male-headed households have a higher average annual income than their female
counterparts – R165,853 and R98,911 respectively – and therefore, have greater spending
power than female-headed households.
“Male-headed households spend more across all consumption expenditure categories,” says
the service.
“It found that in 2015, the average South African household consisted of three to four
persons, with an average annual income and consumption expenditure of R138,168 and
R103,293, respectively.”

The greatest household expenditure went to housing and utilities (32.55%), followed by
transport (16.29%).
“Another interesting finding was that, on average, households spent more on recreation and
culture (3.81%) than they did on education (2.45%),” says Stats SA.[ CITATION Pre17 \l
7177 ]

See how South Africans spend their income.

1.4

Online security services can protect your credit

Good credit takes a long time to build, and it can be destroyed before you have an idea that
it's happening. Oftentimes, canceling your credit cards isn't enough if your number gets out.

Someone with enough of your information can not only buy expensive things using your
banking credentials, they could also potentially open phone contracts, take out loans,
purchase real estate, or get in deep with the taxman. Especially if you're already the victim
of a data breach, an online security service can prevent the likelihood of you watching your
credit score plummet.

Online security services can get your stolen money back

Not only do worthwhile online security services monitor for suspicious activity, with the
right plan you can also receive assistance from lawyers and reimbursement for lost funds.

All services don't offer the same package, and there's usually a limit to how much you can be
reimbursed, but having that assurance in the back of your mind is no doubt a boon for
anyone who's heading into an otherwise awful situation.

Online security services can protect your identity

Not being able to use your own identity because it's in the hands of someone else leaves you
feeling helpless and frustrated. Once someone else has their hands on your identity, it can
be expensive and difficult to get it back without someone fighting on your side.

Worthwhile services monitor where your personal information is used in a number of

different cases. Did someone try to open a phone contract in California while you're living
comfortably in Minnesota? You'll be notified immediately on your phone, and if it's not you
who's using your identity, you can shut it down immediately.

Online security services can help regain your identity faster

If the worst has happened and your identity has indeed been stolen, an online security
service can and will help you regain it. Depending on the plan you have, the service will take
care of the paperwork and hassle of restoring your identity, leaving you free to live your life
as normally as possible.
If you going in alone against the theft seems like an overwhelming scenario, these services
have trained professionals that can get things done the right way.[ CITATION Cal18 \l 7177
]

Question Two:

1.1
- Know Your Audience: Whether your business is hoping to acquire new customers or keep
past clients loyal, knowing exactly who is in your target market is vital for successful
marketing strategies to be effective. If you are going to offer discounts, take a look at your
best and worst selling products. Reduce those two prices or even combine them for a 2-for-1
sale in hope customers will get both. This is a great opportunity to hook people with a
product they already love and then expose them to a product they may not be familiar with.
- Be Transparent: Thanks to the implementation of technology in advertising and social
media marketing, customers are empowered to know where the best deals are. Reeling in
shoppers with false advertising could present a bad image of your company to the public
regarding marketing ethics and standards. Save time by being upfront and honest about
what deals are and aren’t included on Black Friday this year.
- Take Risks: While being transparent with your marketing is important, being ready to take
a risk can help boost business this holiday season. Whether it’s implementing an innovative
social media marketing plan or participating in a giveaway, calculated risks can lead to high
rewards for your small business.[ CITATION Nat16 \l 7177 ]

1.2
The app conveniently stores your Makro access card details on your phone, and serves as a
gateway to m-Rewards – a rewards program designed to help you buy the products you
need and earn the rewards you deserve. So, you can shop in store or at Makro.co.za for
participating products and earn cash back on the m-Card app. What’s more, since your cash
rewards are stored in your m-Wallet, they can be spent in any Makro store, be shared to any
other m-Wallet, or donated to charity. This means there are no points and no catch, only
cash. You can redeem any amount, subject to what is available in your mWallet. You can
download the app from Google Play Store or iOS App Store. You will have the choice to
either present your traditional Makro Card or your mCard to the cashier. If you are a Trade
Debtor, you will however have to produce your physical card in store as well if you wish to
pay with your Trade Debtor account.[ CITATION Mar \l 7177 ]
1.3
You earn a step every time that you purchase one of the qualifying products with your
Makro Card that is linked to the mCard app. There is a maximum number of times that you
can earn the reward within the promotion period. You can track the steps and rewards you
earn on your mCard app. A total of 21 Makro stores trade in South Africa, bringing
convenience and affordability to local households and businesses. With the e-commerce
addition to its offering, customers can enjoy its deals and value-added services across a
broader reach of locations. Its extensive online shopping range includes most items
customers would expect to find in a Makro store, as well as an extended and marketplace
assortment, and carries with it the same ethos it has always maintained. It operates under a
low cost/low margin trading philosophy, enabling the company to deliver quality
merchandise at competitive prices [ CITATION Mak \l 7177 ]

1.4
What’s more, since your cash rewards are stored in your m-Wallet, they can be spent in any
Makro store, be shared to any other m-Wallet, or donated to charity. This means there are
no points and no catch, only cash.

Your cash rewards on the mCard app are stored in a mWallet. Funds in your mWallet can be
spent on purchases in any Makro store or transferred to any other mCard holder at your
discretion. Also this make it easier for customers to buy products online and save time ,
which the customers will like and build a relationship with makro and come more wil be
more likely come purchase from makro again. Encryption Technology

E-wallet payment providers make heavy use of modern encryption technology to enhance
mobile wallet security. Many people fail to realise that we use encryption technology on a
daily basis. Nearly every computing device from smartphones to desktops to tablets utilizes
some level of encryption to keep consumer information safe. It does this by turning normal
data or “plaintext” into a grouping of random characters or “ciphertext” that can only be
read by those with a special key. The majority of companies use a 128-bit data encryption
technology to secure their data.

Is encryption really safe?

The amount of time, computation cost, and patience to crack modern encryption algorithms
make breaking an encryption without a key a near impossible task. That’s not to say that
encryption doesn’t have vulnerabilities, typically referred to as backdoors. However, the
likelihood of these types of digital backdoors working is minimal at best.

Password Protected

The past few years have seen a dramatic shift in how and why consumers use their
smartphones. Smart mobile devices connect people to their business and social networks as
well as bank accounts, car insurance, medical databases, and even home operating systems.
They are the life-blood for consumer day to day activities. To prevent access, smartphones
employ a variety of mobile security measures. These include complex alphanumeric
passwords as well as biometric protocols, such as fingerprint access and voice activation.

E-wallets employ a similar method. Consumers can add an additional password protection to
their e-wallet account. Combining that with advanced encryption methods further protects a
consumer’s information from hackers and other third parties.

Acts as a Proxy

Unlike credit cards, a secure e-wallet service will help conceal a consumer’s banking and
private information. E-wallets only access the funds that a consumer makes available. This
means that when a transaction is made, e-wallets do not access a consumer’s wider banking
information to make payment and will not log metadata that can be captured by a third
party. By acting as a proxy, e-wallets provide better mobile wallet security by preventing
third parties from accessing information that can be used to commit fraud or identity theft.

Additional benefits of e-wallets that add to the payment service’s safety and usability
include:

Accountability

A secure e-wallet allows a consumer complete traceability of all of his/her transactions.

Unlike cash transactions, every eCommerce transaction is logged and time stamped; and can
be viewed at anytime and anywhere without having to go through the burdensome action of
logging into your bank account and combing through your accounts.
Instant Payments

E-wallets allow quick and efficient transactions compared to bank accounts and credit cards
that have to pass through additional databases and processing systems before the
transaction is completed. It can take up to 2-3 days before a credit card or debit transaction
appears on a consumer’s bank account, causing confusion about available balances.

Limited Risk

Let’s say someone loses their phone. It is unlocked or doesn’t have a password, and
someone with less than positive intentions locates it. Whoever gets a hold of that phone will
only have access to the funds placed in the e-wallet account instead of to an entire bank
account through the loss of a physical wallet. The shortfall of funds would hurt but it would
be minimal and short-lived since the majority of people who use secure e-wallets only put in
a few days or weeks’ worth of pay. [ CITATION Cal181 \l 7177 ]
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