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South African businesses are struggling to keep pace with the growth of e-commerce

While the cost of doing business increases as companies struggle with ad hoc systems, legacy technology, skills gaps and weak infrastructure, global e-commerce companies with a “wealth of know-how” are rapidly intensifying competition.

Therefore, according to a report published by global professional services company Accenture, the influx of best-in-class global players into the South African market is changing the dynamics of the industry, posing a challenge for local companies around the world.

The report found that 95% of South African leaders believe that e-commerce is growing faster than they can adapt and believe that being where customers are is costly, confirming that It is difficult to keep up with the pace of change.

“The days when e-commerce was simple are long gone – if they ever existed. Today’s reality is that e-commerce is complex, dynamic, disruptive and competitive. In such an environment, companies have choices – potentially existential ones,” says Accenture’s sales and trade leader in Africa Mushambi Mutuma.

To understand executives’ perspectives on e-commerce and how they are executing their strategy, Accenture surveyed 1,300 global executive leaders and decision-makers from 12 industries and 16 countries. Seventy-five of the companies surveyed were based in South Africa.

“Around 100% of South African executives surveyed believe they have made the right investments in e-commerce. We were surprised by the high self-confidence of these managers. This may mean that they evaluate their e-commerce business channel by channel rather than as an integrated function that requires constant reinvention.

“It is also possible that the high level of confidence is due to short-term gains recently made at the expense of long-term strategy,” says Mutuma.

The Accenture report also shines a light on companies around the world that are “doing things differently,” describing these “champions” as “redefining their e-commerce principles and leading in revenue, profitability and non-financial performance, delivering value for the business and its stakeholders . They know how to run e-commerce without compromise.”

“Our analysis of global survey data revealed three distinct groups of companies: leaders, leaders and compromisers. The analysis compared companies’ performance across seven non-financial e-commerce outcomes: e-commerce experience, business partner and supplier experience, conversion rates, customer satisfaction, Net Promoter Score, competitiveness with digital leaders, and competitiveness with industry peers,” Accenture adds retail leader in Africa Sheetal Patel.

Railway workers – about 55% – cope normally. While some have limited success in getting to know their customers as people, Accenture says change is slow because of leadership and cultural and organizational resistance.

Compromisers – about 25% – “throw money into e-commerce, chasing the newest shiny object and not getting results,” Accenture says, explaining that they operate reactively, disconnected from customers’ lives and hampered by their own organizational structures.

Champions take an innovative and life-centric approach to their e-commerce strategies, achieving 85% greater revenue growth and 31% greater profitability than their peers.

Accenture describes them as “bold” and making “big moves” in technological advancement, talent growth and transformation of organizational structures.

“Most importantly, they perceive consumers primarily as people whose goal is to comprehensively and effectively meet their needs,” the company adds.

“Becoming a champion means moving beyond silos and recognizing that to stay ahead, we need to change traditional models and existing structures. As the digital e-commerce landscape continues its rapid evolution, champions stay one step ahead, overcoming the risk of stagnation through constant assessment, evaluation and constant reinvention,” says Patel.

Accenture says being a champion is based on one core principle: simplifying the e-commerce journey to improve profitability and the consumer experience.

The report details three paths observed in various organizational models and company structures.

The first is to prioritize better experience investments over operational and talent investments – a path often chosen by consensus-based companies where multiple leaders influence decision-making.

Accenture argues that these organizations need to take a more holistic approach or they risk being stuck with technology they can’t optimize due to fragmented structures.

The company adds that organizations with command and control management structures tend to prioritize operational and talent changes over investments in technology and experience at the expense of building a strong digital foundation.

“Many South African organizations are entrenched in these outdated models and urgently need transformation to thrive in the changing e-commerce landscape,” says Accenture.

The third and most desirable path, according to the company, is to create a sustainable journey where companies simultaneously build capacity across experience, technology, operations and talent without having to break the bank.

He notes that this approach requires patience, vision and strong leadership, as well as clear direction for further actions at the management level.

“In an era where e-commerce is evolving at astonishing speed, our ‘Trading Without Compromise’ research charts the way for South African businesses to realize the enormous potential of digital markets. We call on leaders and decision-makers to take decisive action by adopting an innovative, life-centric approach that empowers the consumer experience.

“By combining technology, operations and talent, you can transcend traditional boundaries and elevate your company to champion status, achieving unparalleled profitability and growth,” says Mutuma.