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Vodacom wants to grow online store ten fold by 2016

The excitement around buying stuff online might be fizzling out in South Africa thanks to badly-designed websites with expensive delivery charges and a deep rooted cultural scepticism about any form of transaction that doesn’t involve card hard cash, but that doesn’t mean it’s going away.

Indeed, some companies are predicting truly explosive growth in the number of people ready to give up their regular journey into hell shopping centre visits and buying stuff off of the web.

One of those companies is Vodacom. Spurred on by competition from banks and the likes of Orange.co.za, which have had great success selling handsets without a physical shopfront, the network operator wants to grow the percentage of sales transactions through its website from around 4% at the current time to a massive 40% by the end of 2016.

Ambitious, but given the way online shopping has become the norm overseas – more than 50% of all purchases are online in the UK, for example – not impossible.

As part of its plan to achieve that goal, it’s hired someone who knows a thing or two about online sales. Lana Strydom joined Vodacom as executive head of online self service sales and marketing three months ago, an in a previous incarnation was head of digital marketing at FNB right at the time the bank started terrifying mobile operators with its aggressively priced handset sales of leading smartphones.

“None of the telcos are really competing in ecommerce right now,” Strydom says, “But for us it’s become a serious play to move outside of the physical shopping infrastructure. Up until now, that’s mostly been through airtime sales and data bundles, but now we want to push into handset sales as well.”

One of the big opportunities that Vodacom has, says Strydom, is that it can sell directly to people who don’t necessarily have a bank account or internet access. While the web front end will remain the dominant part of the online store, its USSD channels and recent relaunch of M-PESA gives it a very strong sales channel in which the company controls everything from the marketing platform to the payment mechanism.

“That’s where we believe we’ve really got a shot,” Strydom says, “The appetite is there. People are already doing things like buying airtime through none traditional means.”

To facilitate this, she explains, the firm has recently launched a Java version of its homepage for shopping via feature phone interfaces, and is working to put a shop into its Mxit app too.

“Historically we never did [online shopping] well,” she says, “There’s a level of excellence you have to get to around user experience, deals and delivery, also this notion about branching out into channels that aren’t known.”

Behind the scenes, says Strydom, the firm is doing a lot of work improving its customer databases. While it obviously has a lot of data about airtime usage and purchasing patterns, she says, the plan is to personalise deals and promote them based on a lot more information that has been languishing.

Better delivery networks and even same day delivery are also being talked about.

For the time being Vodacom’s online store will remain focussed on things that are central to the company’s operations – handsets, tablets, MiFi dongles and so on – although Strydom doesn’t rule out future expansion into other areas. The important thing, she says, is that there’s a desire that stretches right to the top of the company not just to improve its own appeal as an online store, but to try to change consumer behaviour in the country as a whole.

There’s also an existential importance. Megastores Kalahari.com and Takealot are beginning to consolidate their operations and have big budgets for future acquisitions.

Just yesterday, Takealot spent part of its R1bn warchest on group buying specialist Superbalist, and earlier in the Naspers closed down many of its smaller online shopping sites to focus on building Kalahari.com into an African Amazon. Neither store does much in the way of mobile phones yet, but the local Orange storefront has proven time and again it’s both faster to market with interesting new handsets, and cheaper than operators’ own stores.

Networks like Vodacom can’t afford more new players to take muscle in on their business in the way banks did.

“There’s a big realisation even at the top structures that if we don’t play now we never will,” says Strydom, “People understand that now. It’s an interesting and exiting place to be and we’re very aware that other people are going to give us a run, but luckily they don’t have a network behind them.”

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