eCommerce awareness, confidence and capability in Africa

2018 01 – EFA Mailer

Trustmark for South Africa!

EFA has been working hard during the past year to prepare for the launch of a South African trustmark. The main aim of EFA is to help increase shoppers’ trust in ecommerce.
We looked at a number of solutions, and identified the best – Safe.Shops – which will be branded Safe.Shops.Africa when we launch in March.

Why a Trustmark?

Trustmarks have an excellent record of encouraging greater trust in ecommerce wherever they are set up. In the Effective Measure Ecommerce research study for SA of 2016, the question was asked, would you buy more if there was a Trustmark system? Despite the absence of any Trustmark in SA, 18% of respondents to the survey said that they would have a greater trust in ecommerce with a Trustmark and would buy more online.

What does a Trustmark require?

There is an annual verification system which asks the e-shop to confirm that it is in line with the relevant laws (CPA, ECTA, POPI), that it has a system for return of goods (if relevant) and that its data is secure (see the articles below for more details). If all is in order, the e-shop pays a fee depending on the level of the Trustmark it wants and the size of the e-shop (the annual fee starts at about 2,400zar a year), and commits to an alternative dispute system in the case of an unresolved complaint. It’s important to stress that the best solution to any complaint, of course, is between the seller and buyer. The Trustmark is not intended to substitute for buyer/seller complaint resolution.

Why Safe.Shops?

The trustmark was originally set up by the Ecommerce Foundation in Amsterdam to encourage greater trust in cross-border ecommerce in Europe. National trustmarks exist in nearly all European countries (in some countries, like Germany, there are multiple trustmarks), but there was no cross border trustmark. The system was designed to be easy to operate, not complex, and modestly priced. It soon attracted interest from outside Europe and is in operation, or in preparation in a number of non-European countries, including Indonesia, Hong Kong, Brazil. EFA is affiliated to the Ecommerce Foundation.

These articles outline the advantages and explain how Safe.Shops works in Europe. We will use Safe.Shops.Africa as both a national trustmark and also as a guarantee for cross border ecommerce in Africa for companies that sign up:

https://trusted.safe.shop/why_trust_is_important_for_webshops ; https://www.linkedin.com/pulse/do-online-trustmarks-work-science-reveals-jorij-abraham/?trackingId=x6Y2Wv8TIX6xvDDNzxNaFg%3D%3D

The World Economic Forum, Davos

Last week our Vice-President, and new President of the ANC, Cyril Ramaphosa, attended the annual WEF conference in a snowy Davros accompanied by a delegation from South Africa. According to the press reports the SA delegation was greeted warmly with many discussions on future trade/investment opportunities.

I wonder if any of them managed to get to the session on Ecommerce? If they did they would have heard a fascinating panel including the Secretary-General of the World Trade Organisation (WTO), the President of Peru, and Mr Jack Ma of Alibaba (who is also Chairman of the ecommerce World Trade Platform – eWTP) discussing the potential for ecommerce, specifically in the developing world.

Last month we reported on the recent WTO meeting in Argentina which attempted to push an initiative on freer global trade for ecommerce (an initiative supported by eWTP and by Nigeria).

Mr Azevedo of WTO pointed out that cross-border ecommerce is still in its infancy and that it required everyone to come together to discuss how to promote it globally.

However, Jack Ma was far more forthright. He started by pointing out that “Ecommerce is not for big companies, nor for developed countries. It is for developing countries and for young people. It provides small companies with opportunities to develop. Ecommerce is for the young”. He went on to point out that trade restrictions will kill small companies, not multinationals. Governments must change their mindset from “how can we regulate?” to” how can we help?”.

The whole panel session is on the WEF websitewww.weforum.org/events/world-economic-forum-annual-meeting-2018/programme Well worth a watch!

Internet Connecting in Africa, A New Report says – more is needed!

Remember those DSTV announcements with Chuck Norris warning that thunder storms across the world can disrupt your DSTV signal? The Internet Society in a new report out this month, titled Promoting the African Internet Economy, points out that the economic case for the internet in Africa is strong, and that there’s plenty of room for improvement.

In particular, internet is still often routed halfway across the world through exchanges in Europe or North America before being delivered back home to users in Africa. There are some local service providers in South Africa, like Telkom, and Kenya, like Kooba and Angani, but it’s still early days for those hoping to introduce internet exchanges in a meaningful scale. This makes the internet both much slower than in the developed world, and, relatively, much more expensive.

The report goes on the point out that in developed countries, the internet contributes up to 3.7% of GDP on average, while in African countries it’s just 1.1%. The internet sector makes up 3% to 5% of the workforce in OECD countries, but in developing countries only 1%. Savings just in the public sector by using more e-government are likely to be between $148 to $318. South Africa is one of the few African countries which has embraced e-government.

Is Ecommerce killing bricks and mortar, and destroying the work force?

You will have seen in the press last year quite a lot of claims by bricks and mortar retailers, particularly in the USA, but also here (for example when Mango closed down its two outlets in SA), that ecommerce was to blame. However, according to BI Intelligence the downfall of US brick-and-mortar commerce is over-stated.

Despite sharp gains in e-commerce, which will nearly double between now and 2021, the lion’s share of consumer purchasing continues to take place in-store. And that’s unlikely to change anytime soon, since the online environment can’t yet compensate for the reasons customers like brick-and-mortar shopping.

  • Larger players need to double down on existing success. As Jack Ma pointed at in Davros, smaller players are usually nimbler, which gives them the opportunity to innovate more quickly and build in-demand solutions. That’s a disadvantage to market leaders; however, they can, and should, leverage their massive distribution networks when upgrading or updating their offerings. Meanwhile, smaller players can win by focusing on niches;
  • It’s all about the platform. No single feature is likely to make or break a merchant’s decision to pursue a specific provider. Above all, they want a robust ecosystem that can evolve over time.

In an interesting study by an American economist, the claim by under-threat retailers that ecommerce destroys jobs is false (https://www.nytimes.com/2017/07/10/business/dealbook/e-commerce-jobs-retailing.html).

Michael Mandel argues from his research that ecommerce more than compensates the loss of jobs in the bricks and mortar retail outlets, and, he points out, the new jobs which are being created by the growth of ecommerce require a better educated work force. His research shows that the new job opportunities are particularly in warehousing. EFA would point out that the whole logistics chain, particularly delivery, is a booming sector for employment.

Employment is a particularly important issue for politicians, of course, and it is good to have research to challenge the myths that ecommerce kills bricks and mortar retail and destroys jobs!

UNCTAD works on promoting global ecommerce

EFA has been in touch with the UN Cooperation on Trade and Development (UNCTAD), which hosts an international conference on ecommerce in Geneva each year. This year the fourth annual Ecommerce Week will be from 16-20 April. There will be a special session on Africa. We hope to get at least one delegate to attend and we are looking for funding. If you can help please let me know (alastair@ecomafrica.org).

The event will place particular emphasis on the role of digital platforms, a key feature of the evolving digital economy. Digital platforms – often accessed through mobile apps – bring together and aggregate demand and supply in ways that were not possible before (being faster, cheaper and more easily coordinated), including in geographical areas/service sectors traditionally neglected.

Digital platforms present new opportunities for international trade and efficient economic activities, including for small businesses. However, the extent to which people and enterprises engage and benefit from such platforms varies considerably.

As we know, there are concerns expressed by some politicians, including our Minister for Trade, Rob Davies, that global ecommerce (he’s singled out the American giants – Amazon, Google, Facebook) will disrupt economies, with potential negative consequences for employment and working conditions.

The fourth E-Commerce Week, with the theme Development dimensions of digital platforms”, will offer a venue for different stakeholders to discuss key challenges and opportunities arising from digital platforms, and put forth concrete actions to ensure maximum benefits for developing countries.

The 2017 E-Commerce Week was attended by 1,000 representatives, from governments, international organizations, the private sector and civil society from 99 countries, with 170 speakers and moderators.

More than 30 sessions addressing policy-relevant topics were organized in collaboration between UNCTAD and another 30 partners. South Africa was not represented in 2017. We must ensure that it will be in 2018!!

Is the World moving back to trade barriers?

There was considerable concern expressed at the World Economic Forum last week that global trade is in for a nasty round of trade restrictions, led by Trump’s Make America Great programme, and by the UK post Brexit.

Trump’s less than flattering views on the Middle East & Africa (those s**thole countries”), doesn’t just extend to the people. Ever since he was inaugurated in Jan last year he has been undoing free trade agreements. Now the OECD has released the latest update to its Services Trade Restrictiveness Index (STRI), which includes new 2017 data on policy and regulatory trade barriers across 22 services sectors in 44 countries.

The release is accompanied by STRI Policy Trends up to 2018, a short report that provides an overview of key policy developments affecting trade in services from the STRI’s launch in 2014 up to today. Analysis shows that although there is evidence of some liberalisation of services markets, the overall 2017 STRI indices are more restrictive than in 2016, highlighting an overall tightening of the global regulatory environment for services trade. The trade in goods is likely to mirror this disturbing trend.

As ecommerce, we need to watch these developments carefully. Cross-border trade is a small but growing part of ecommerce in SA.


Miscellaneous

The Electronic Communications Act (ECA) Amendment Bills

Cabinet has approved the ECA Amendment Bill, but increased the date for public comment to 31 January. Parliament will then be charged with finalizing the text. As readers of the EFA Newsletter will recall, the Bill proposes the introduction of the controversial wholesale open-access networks (WOAN) to share out spectrum in the future

Cross- Border Import Procedures Made Simpler – For Some

New UNCTAD research reveals how nearly 60 countries have prepared the ground to cut red tape and streamline revenue collection in the year since the World Trade Organization’s Trade Facilitation Agreement (TFA) entered into force in February 2017, but says such reforms should go beyond TFA compliance.

The TFA requires most of the world’s trading nations to recognize trade-easing measures and so reduce the loss to developing countries of billions of dollars that lengthy waiting times, un-gathered income and spoiled goods can cause. UNCTAD estimates that the cost of cross-border trade for developing countries is on average 1.8 times higher than for developed countries. Even between the SADC customs union countries delays for commercial shipments at borders can be days, not hours, long.

To Bot or not to Bot – LinkedIn fights attempts to access its public database in the USA

The Internet Archive, the Electronic Frontier Foundation and DuckDuckGo are arguing in an interesting US court case that Web robots (bots) should be allowed to access those parts of LinkedIn which carry publicly available information, and that placing automated scripts (bots) to access publically available data is neither hacking nor violating a website’s terms of use.

LinkedIn, on the other hand, argues that placing Bots on its websites to access its data is a crime under the US Computer Fraud and Abuse Act (CFAA). LinkedIn is understandably protective of its social graph and closed its more widely available API a few years ago.

This court case has wide implications for the content of websites and their terms of use in the USA. But given the global impact of rules surrounding the internet, companies (or organisations like, for example, EFA) that carry “public” information or data on their websites should be aware that a court case in the USA could reduce the protection they presently believe they have in their IP.

New Business Platform for the Americas – a model for Africa?

At the World Economic Forum last week, the President of Peru introduced an inter-Americas initiative to promote the digital economy between South and North America, supported by Google, Alibaba and other major ecommerce players.

ConnectAmericas offers an online Academy for training, business support resources, content, business opportunities, financing opportunities, and contacts with potential partners in other countries. See https://connectamericas.com/

The Informal Economy in Africa

The International Labour Organization (ILO) estimates that the informal sector’s average size in sub-Saharan Africa is on average 41% of GDP (it’s estimated at about 30% in South Africa, but 60% in Nigeria and Tanzania).

The informal economy is a very large employer, representing some 75% of non-agricultural employment, and over 70% of total employment in sub-Saharan Africa. More than 90% of new jobs created in some African countries are in the informal economy. Researchers at London School of Economics have been looking at the sector in a new white paper.

Malawi Moves Forward on Allocating Addresses

The Malawi Communications Regulatory Authority (MACRA) has said it will roll out the second phase of the national address and post code (zip/postal code) project starting with the commercial city of Blantyre this year.

MACRA director general Godfrey Itaye says that once fully operational, the project will enhance service delivery in the post and courier industry since there will be a comprehensive system of property location, numbering and mapping and associated processes.
Ecommerce using courier services is presently hindered by the lack of a comprehensive street naming, house numbering or a postal code system, which leaves the dispatch workforce hunting the exact destinations of the goods they carry.

Malawi is the only country in the Southern African Development Community (SADC) which is behind in street naming and property numbering, but other countries, such as Namibia, lack proper postal codes – we understand that SAPO is considering improving the SA postal codes to make them more granular. The lack of effective postal codes causes postal and emergency service providers to operate inefficiently. Usually, the lack of good postal codes also forces couriers to concentrate on doorstep deliveries to areas where addresses have easy to identify addresses, eg in towns.

EFA is affiliated to the Global Address Data Association (http://www.globaladdress.org/ ) which is actively promoting proper postal codes around the world.

The EU’s General Data Protection Regulation (GDPR) continues to cause fear

European businesses have until May to bring their data processes into line with the GDPR, as readers of the EFA Newsletter will know. The Data Protection (Privacy) Regulators have now poured oil on the fire with a very restrictive interpretation of “consent” in a draft paper which was published this month.

The paper suggests that consent cannot be inferred from any situation in which the consumer has paid or been paid. In other words, the paper questions the right to use a customer’s data which was given “in the process of a sale”. This provision can be found in POPIA, section 69 (consent for marketing by electronic media), as the major exemption from consent.

European industry has time to argue against this proposal and hopefully will be successful. Since the POPIA Regulator has clearly indicated that it is looking towards the EU for guidance when implementing the POPI Act, we are obviously concerned with the very restrictive approach of the EU Privacy Regulators.

Be on the look-out, the POPIA Regulator is likely to call for the full implementation of the Act in March. This can be done by an order from the Minister of Justice. The Regulator will then swing into action.

The IAB Summit and Bookmark Awards

Tickets now on sale for the IAB Digital Summit and 10th Annual Bookmark Awards

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