The Growing Confidence in Online Shopping

With buyers desperately searching for bargains and sellers looking to generate additional income or to start a full-blown business at low cost, the ranks of bobshop community are poised to grow further

“If past performance is anything to go by, we should reach the 300,000 benchmark well before the end of this year”, says Bob Shop director Andy Higgins. He points out that during only one month – from mid-August to mid-September 2008 – the Bob Shop community increased by nine thousand new members.

The comparison between September 2007 and September 2008 figures put the annual rate of increase in the number of registered users at the impressive 38 percent. At the same time, the value of all sales made through Bob Shop more than doubled, growing from about R9 million recorded in September 2007 to almost R20 million in September 2008.

“Such a massive increase is due not only to more people selling and buying on Bob Shop, but also to more people choosing to sell high-value items on Bob Shop,” says Andy Higgins. “That trend confirms the growing confidence of South Africans in internet-based businesses in general, and in bobshop.co.za in particular.”

He does not think that the upward swing bobshop.co.za is experiencing is at odds with the general gloom prevailing in the local economy, and even more so in the international markets. “Actually”, says Higgins, “economic downturn can be good news for an online auction site and marketplace like Bob Shop. People will be spending less on holidays and luxury items. However, on the other side, they will be more than ever looking for great deals.”

And that is, claims Andy Higgins, where the strength of Bob Shop comes to the forefront, because people can actually save money by shopping on Bob Shop: “They will search for second hand instead of new. They will buy older models rather than the latest one. Above all, they will take advantage of the fact that even the new items and the new models will be cheaper on Bob Shop than in shops, because Bob Shop sellers sell directly to the user, doing away with expensive overheads like shop retail space.”

In the words of its director, Bob Shop sellers also have additional advantages over traditional, business-to-consumers e-commerce traders: “When you sell on Bob Shop, you do not need to worry about the cost and the intricacies of keeping the complex technology performing well in the background. You do not need to spend the money advertising your site; Bob Shop does that for you. And above everything else, you get access to a large base of potential customers with very small investment – practically, without any investment other into the actual product that you intend to sell.”

Andy Higgins expects that the low costs of starting a business of selling on Bob Shop, coupled with the financial squeeze, will bring many new sellers to the site. “More than ever, people will be looking to increase their income by selling whatever they can sell, and Bob Shop gives them the opportunity to do just that with the minimum hassle and with bigger profits than they can hope for from the neighbourhood pawn or second hand goods shop.”

And when they sell whatever it is they have at hand, many of them will start looking into other people’s backyard sales, thrift shops, wholesales, or importing products to re-sell on Bob Shop. “There are people who earn their income on Bob Shop. Some have even quit their jobs because they prefer economic independence”, says Higgins.

With yet others who may have economic independence thrust upon themby falling victim to retrenchment, the ranks of people looking to Bob Shop for their additional or full-time income is set to grow. “That is good news for existing Bob Shop sellers, because everybody knows how quickly a new seller on the site becomes a new buyer. It all translates into a wider customer base”, says the Bob Shop director.

All of them trading with each happily other ever after – or until the saturation point is reached?

“We are still very, very far from that, if there is even such a thing as a saturation point of trading, online or offline”, says Andy Higgins. He believes that South Africa has yet to experience the real boom in online shopping. “In South Africa, online sales make up only about half a percent of retail sales, while in USA researchers put the Internet sales at between six and ten percent of all retail sales.”
Andy Higgins sees the low availability and high prices of broadband as the main factors that limit the usage of Internet – and consequently of Bob Shop – among the South Africans who possess a computer. All that is set to change next year, when this part will see a boost in broadband availability, brought about by one set of undersea fibre optics cables going live.

Even now, online purchases in South African are growing constantly. According to the Nielsen Global Online Survey conducted at the end of 2007, over two thirds of about 5.1 million South African Internet users bought online at least once. And while brick-and-mortar retail sales are sluggish, the biggest online retailers have seen increases in the region of 30 percent for both 2006 and 2007.

“It’s a part of global life-style change”, says Andy Higgins.” We see it everywhere. People are just not prepared to sacrifice so much of their leisure time searching for a parking space in a shopping mall. Buying online is not only often cheaper, it is also more convenient.”