The 2021 Annual State of the Forum by the Chair, Ms Karen Nadasen
Ecommerce has been the only silver lining during the COVID storm over the last eleven months. The economic and unemployment fallout from the pandemic will certainly continue for a long time in South Africa and across the globe.
We believe that South African ecommerce over these last months has leapfrogged by at least 5 years in terms of turnover and also the growth of e-shops and support services (such as delivery services across SA) which we rely upon in the ecommerce space.
This raises the question of the measurement of ecommerce. Our Research and Education Committee, chaired by Prof Dr Adheesh Budree, has brought together academics from 6 universities to assist in the collection and analysis of data on our sector with the full support of the Department of Trade, Industry and Competition (DTIC). We are now looking for sponsorship. Our study will look at turnover for B2C (goods and services), B2B, C2C, and also at employment data. Members will appreciate that good data will attract investment into our sector.
At the start of the lockdown in March 2020, nearly all ecommerce activities were frozen. EFSA worked closely with our sponsoring Department (the Dept. of Communications and Digital Technology – DCDT) to ensure that all forms of ecommerce was permitted. We provided the Department with detailed argumentation of the benefits of online shopping in a lockdown, which persuaded the COVID Control Centre to open up ecommerce in mid-April. We were invited to join the DCDT COVID Committee which set out rules for delivery services and ecommerce businesses, and we still remain active on that committee.
We are an active member of the Financial Services Control Authority’s Ecommerce Advisory Committee, with two EFSA members representing the sector, Tebogo Loate, Member of the Board and the CEO. This committee includes all the government players (DTIC, DCDT, NCC, SARB, SAPS, SARS, etc). Among other initiatives, EFSA drafted a letter from the FSCA to the Minister of Finance on the World Trade Organisation’s (WTO) moratorium on customs duties for electronic transfers. If this moratorium disappears cross border costs of services and data will increase, creating extra costs for ecommerce.
EFSA’s relations with the relevant parts of the Banking Federation remained excellent throughout the last twelve months. EFSA sits on two PASA stakeholder (card and non-card) committees. We arranged pre-Black Friday discussions with PASA as we have done since 2017. And we have continued to collaborate with SABRIC to assist our members be aware of banking fraud and cybercrime.
As the recognised voice of ecommerce, we have been approached by the Reserve Bank (SARB) which is revising its ‘interchange determination process’. This relates to the commission banks apply on transactions, and is of course very important for ecommerce. The Online Payments Committee under the chairmanship of Thomas van der Spuy is preparing EFSA’s position.
We have also continued our excellent relations with the Consumer Goods and Services Ombuds (CGSO). It is of great concern to note that consumer complaints to the CGSO about online purchases have increased sharply during the past year. Trust in ecommerce has certainly increased during 2020, but we all need to be very aware that trust is earned and can be as quickly lost. EFSA needs to consider how best to address this issue. One solution is our trustmark, however lack of resources has meant that we have not been able to market the trustmark as we would have wished.
In 2021 we will be introducing a new working party to draft best practices for ecommerce marketing. Not only will this help agencies with the skills necessary for ecommerce marketing, but also it will assist us in the preparation of our planned ecommerce awards which we will be launching online at the end of this year. The awards are being overseen by the EFSA Marketing Committee, chaired by James van der Hoven, and the Special Projects Committee chaired by Wale Adejumo. Both those committees are also considering the other events for 2021.
During 2020 EFSA responded to the Information Regulator’s request for views on the appointment of “Information Officers” in companies. This was an element in the preparation for the full implementation of the Protection of Personal Information Act (POPIA) in July 2021. EFSA is preparing a series of teach-ins on POPIA during this year.
EFSA gave its input into the President’s 4IR Commission over the 2 years it collected material for its report. That report was published in January, and an observatory has been set up to consider which initiatives need to be fast-tracked. EFSA appreciates that regulation of the digital economy (of which ecommerce is the leading element) is bound to increase over the foreseeable future. For that reason we have worked with EndCode and Legalese, both law firms specializing in regulations related to the digital economy. We are presently preparing a MoU with Legalese. Our Legal and Regulatory Committee, chaired by Rieka van Wijk, brings a wealth of expertise to our work, particularly on privacy issues, which will be essential this year.
We also prepared a submission to the Competition Commission’s paper, ‘Competition in the Digital Economy’. The CEO joined a webinar on this Paper organized by the Mandela Institute in December. In February the Competition Commission published its Terms of Reference for investigations of a number of major ecommerce players in SA. EFSA prepared a submission on the CompCom Terms of Reference pointing out that ecommerce is still a very new sector in SA and that there is a close inter-relationship between the many aspects of the sector, such as delivery, web design, payments, etc., which depend on economies of scale to develop effectively.
We are watching the progress of the Cybercrimes and Cybersecurity Bills. The latter made it through the parliamentary processes in December and now sits on the President’s desk for signature. While we fully support both laws and the need for greater cyber security, we are concerned that the rules may be too onerous for SMEs and we are therefore watching how they are to be implemented. We plan a webinar on these regulations as soon as they are signed into law.
We have been working with the DTIC on SA preparedness for the African Free Trade Area (AfCFTA). This ties in with the work of our pan-African body, the Ecommerce Forum Africa (EFA). The Free Trade Area was formally launched on 1 January 2021, however numerous online events lead up to this, including a conference on ecommerce organized by the African Union (AU) in December. The CEO was involved in a large number of these events as moderator or panelist. The AU has announced that it will be preparing a special protocol on ecommerce during 2021.
The CEO wrote three papers for the SA Institute for International Affairs on the digital economy and the AfCFTA, which have allowed us to provide recommendations to the opinion formers around Africa. “Digital Disruption in Africa – Mapping Innovations for the African Free Trade Area in Post COVID Times”; https://saiia.org.za/research/the-digital-economy-and-e-commerce-in-africa-drivers-for-the-african-free-trade-area/; https://saiia.org.za/research/renewed-urgency-to-implement-the-african-continental-free-trade-area-how-can-africa-prepare-for-a-post-covid-19-world/
We expect that the AfCFTA will remain a central point in our work for some years to come with a number of research opportunities to guide civil servants and opinion formers.
Finally, I would like to express my thanks as Chair of EFSA to all those who helped us during the last year. In particular, we would not have been able to work efficiently without the IT and website support we received from Vane Digital and our Treasurer, James van der Hoven. The website (www.ecomafrica.org) provides an excellent introduction to our work. We now also run a Facebook page (https://www.facebook.com/ecommerceforumafrica ) and a LinkedIn group (https://www.linkedin.com/groups/12019296/). There is a Twitter handle.
I would like to thank the CEO, Alastair Tempest, the Head of Communications, Lauretta Ngakane, and all the Board and committee members who have given both their expertise and time to ensure that the EFSA has remained effective and professional.
We need more members to ensure a solid financial base and to be able to invest in more marketing – for example of the trustmark.
Looking back over the past year it is clear that the sector faces issues which can only be solved by the collective voice which EFSA provides.
CEO PayU South Africa
30 March 2021