CHAPTER 5: DISCUSSION
5.2. Answering research questions
5.2.4. Research Question 4
109 5.2.3. Research Question 3: What do Durban and Pietermaritzburg SMMEs know
110 5.2.4.2. Technological capabilities
5.2.4.2(a). Internet access, e-mail and website
The research found that the majority of SMMEs that adopted e-commerce in Durban and Pietermaritzburg had i) their own company e-mail, ii) internet access and iii) a website. In addition, the majority of non-adopters of e-commerce in Pietermaritzburg had a website. This means that those that did not adopt e-commerce (specifically in Pietermaritzburg) were at the bottom of the adoption ladder. Courtney and Fintz (2001) advocate that the scope of e- commerce activities ranges from entry level activities to more advanced activities. In addition, Akkeren and Cavaye (1999a:4) state that “sophisticated e-commerce technologies are not likely to be adopted before entry-level activities are used more readily”. In the context of this research, there is evidence that non-adopters in Pietermaritzburg have i) an online presence, and ii) electronic mail.
The evidence of online presence from non-adopters is not surprising as two-thirds of SMMEs in South Africa have a website (Goldstuck, 2012). The increase in the number of SMMEs with an online presence may have been stimulated by the recent Woza online initiative. Woza online is a platform (created through a joint venture between South African Department of Trade and Industry, Vodacom, the Human Resources Development Council and Google) that enables SMMEs to create their own websites through easy-to-follow steps without any cost (Goldstuck, 2012). Although non-adopters have the necessary “ingredients” for e-commerce, further research is needed to investigate the readiness of non-adopters towards e-commerce. Such readiness would be assessed based on the purposes for which e-mail and website are used.
In Durban, the majority of non- adopters were not ready to adopt web-based e-commerce as the majority of them indicated that they will never have a website.
According to Goldstuck (2012), SMMEs with websites are highly likely to generate substantial profits as compared to those that do not have an online presence on the Web. He argues that, according to the SMME survey 2012,
“As many as 79 % of SMMEs with a website report that they are profitable, with 30 % of these stating they are strongly profitable. Of those without a website, only 59 % report profitability and just 14 % of these, claim to be strongly profitable” (Goldstuck, 2012:10).
The SMME survey 2012 report indicates that one of the major constraints towards having an online presence through a website is the perception that in South Africa, “there are not enough people online to justify a web presence” (Goldstuck, 2012:10). However, in South Africa, the
111 number of people having access to internet and World Wide Web (WWW) is increasing rapidly (Goldstuck, 2012). There are three main reasons for such an increase, i) the installation of new undersea telecommunications cables in South Africa that will lead to an increase of the internet bandwidth at a cheaper price, ii) the granting of licenses that allow internet Service Providers to build their own networks and iii) the growth of cell phone internet.
The above suggests that SMMEs that do not have a web presence (such as the majority of surveyed non-adopters of e-commerce in Durban) are “losing out on a major channel of potential communication” (Goldstuck, 2012:10). As many people are getting access to the internet, a web presence could be a channel for i) advertisement, ii) customer acquisition, iii) sales, and iv) customer retention.
5.2.4.2(b). Computerised inventory of company products and services
As expected, this research found a significant relationship between e-commerce adoption and having a computerised inventory of company products and services. In both locations, the majority of e-commerce adopters have a computerised inventory of company products and services. However, the majority of non-adopters do not have computerised inventory of company products and services. Conrad (2012) argues that a computerised inventory of products and services, if properly managed, can yield significant gains such as i) speed and efficiency through automation of processes, ii) document generation as documents such as purchase orders, invoices and account statements can be generated automatically, iii) timely data as managers have the right information at the right time through computer generated reports from the database containing the products or/services.
5.2.4.2(c). Computerised database of company customers
In contradiction to Dyerson et al. (2009) research findings about e-commerce adoption by UK SMMEs, this research found that there is evidence of e-commerce usage to build customer databases. The majority of SMMEs that adopted e-commerce in both locations (online payment by credit card, online ordering, providing customer services through the SMMEs’ websites) already had a computerised database of their company’s customers. On the contrary, those that have not adopted e-commerce did not have a computerised database of customers in place. A computerised database of customers may contribute to customer loyalty and retention (Hughes, 2012). A customer database assists in designing specific personal marketing strategies based on the buying behaviour of customers (Hughes, 2012). This allows the SMMEs to generate products that are specifically tailored to the needs of their clients. Such specifically tailored database-based marketing may result in loyalty and retention of customers. However, SMMEs
112 are cautioned that database marketing yields positive gains if the target customers benefit from the database-based retention strategies used. Therefore, the setting up of a computerised database of company customers should be integrated with the marketing plan of SMMEs so that it may be beneficial to the company.
5.2.4.2(d). Computerised database of company suppliers
As expected, this research found that there is a significant relationship between placing orders with suppliers through the internet and having a computerised database of company suppliers.
In both locations, the majority of SMMEs that place orders with suppliers over the internet have a computerised database of their suppliers. However, the majority of those that do not place orders with suppliers over the internet indicated that they will never have a computerised database of their suppliers. This suggests that SMMEs could be using the database to foster relationships with their suppliers. However, further research is needed to determine the purpose (s) for which such database is built. It will be particularly interesting to investigate the impact of having a computerised database of company suppliers on the prospects of instituting a Just-in- Time delivery system.
5.2.5. Research Question 5: What are the inhibitors of e-commerce adoption in