FNB has launched a new e-commerce platform that is looking to lure business owners away from sites such as Shopify, using its payments capability to allow merchants to list and sell their products through its app as it looks to capitalise on the e-commerce boom in SA.
Online retail, a part of the broader e-commerce trend, has been on the rise globally for the past decade. That said, in SA, where the retail culture has traditionally been characterised by high foot traffic at shopping centres and malls, as well as informal and township economies, online retail made up less than 2% of total retail sales before Covid-19 stuck in 2020.
The pandemic has provided a huge boost to e-commerce, driven by shoppers avoiding shops and malls. Prosus-backed fintech platform PayU estimates that this now accounts for more than 5% of total retail sales, while data from Mastercard on consumer spending recently showed that 68% of SA consumers are now shopping online.
To take advantage of this growth, FNB has launched its WebStore service, which it says “will provide businesses with a fully functional e-commerce website”.
By signing up for the service, businesses will be able to have an e-commerce website set up for them. This is similar to the functionality people can get from the likes of Shopify, WhatsApp Business, Facebook Marketplace and BigCommerce.
The difference is FNB is a bank and will give businesses access to more than 3-million potential customers. The bank has also partnered with website developers, social media platforms and courier companies to get a leg up on competing services.
“The reality is it’s the passion of the small-business owner and a little bit of business acumen that in turn will drive their success,” Gordon Little, CEO of FNB Commercial, told Business Day. “We’re just doing our best to oil the wheel in terms of providing simple tools for them to use.”
“In order to move from, let’s say, selling on Facebook Marketplace to evolving your business to running a full e-commerce store, there are those elements that help an entrepreneur to scale. We are hoping that by using some of our buying power and partnering with third parties to provide these services, we can lend a bit of a leg up or hand to those individuals to find scale,” he said.
It seems companies with large user and consumer bases are looking for ways to create new revenue streams. Technology businesses offering a service often face the problem of growing their user bases to a point where they can start making a return on their investment.
Fixed-line operator Telkom recently drew on its half-a-million Yellow Pages users to launch an online marketplace of its own: Yep!. Vodacom is probably hoping to draw on its 44-million users, having launched its marketplace and super app earlier in 2021 with Chinese fintech giant Alipay.
With e-commerce rising in SA, it makes sense for marketplaces to be gaining in popularity. As a bank, the one thing FNB has over its competition — except Nedbank with its Avo platform — is integrated payments.
“Any form of expansion which pushes payments across the bank hub of FNB is good for the bank,” said Little.
SA now has a number of large players all competing to make the most of the country’s Covid-19 e-commerce boom.
Despite such heavyweights being in the game, the e-commerce king is Naspers’s Takealot, which includes Superbalist and Mr D Food. For the full year to March 2021, Takealot’s revenue increased 65% year on year to $606m (R9bn), up from $392m in the prior year.
For FNB, WebStore is another piece in the bank’s ongoing e-commerce effort.
WebStore comes after FNB’s 2020 launch of an online marketplace on its mobile banking app, for services-based businesses. The platform allows customers to connect to highly rated plumbers, electricians, builders and home caterers, among others.
With the product piece of the puzzle now in place, Little says FNB’s offering is “more complete”.
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