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NetFlorist, Mother's Day and B2C

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Posted May 25, 2001 By Staff     Feedback

Consumers are beginning to trust the Internet as a viable means of purchasing even perishable goods.

We recently spoke to Ryan Bacher, Director of online florist NetFlorist, and asked him a few questions about what it's like to be in B2C in South Africa at the moment. Given that Mother's Day was this month, it was natural to use it as an example.

NetFlorist delivered about two and a half thousand packages on Mother's Day, according to Bacher, and only received a 0.8 percent "query rate," i.e. 99.2 percent of deliveries satisfied customers and were on time. Bacher gives the credit for this to Sun Couriers, who managed to deliver loads of extremely perishable goods in good condition and on time.

So from NetFlorist's experience, South Africa's logistics system are timely and careful; but they must scale -- deliver 20,000 or 200,000 if need be -- if B2C is to be trusted by South African consumers. Whether they can still remains to be seen.

These deliveries originated either from NetFlorist's network of offline florists, or from a "farm" -- an agribusiness that both grows and aggregates flowers. NetFlorist hopes to source more of their flowers from their farm as time progresses -- there are logistical benefits to operating from a central point and financial ones to disintermediating the florists.

The people making purchases tend to female, says Bacher, with 60/40 split in favour of women. Their average order comes to R190 and most orders (60%) now come over the Internet and not via their call centers -- the first time the Net has been responsible for the majority of orders.

This indicates that consumers are beginning to trust the Internet as a viable means of purchasing even perishable goods.

When asked the uncomfortable question -- "Are you profitable?" -- Ryan said NetFlorist made a loss in the 1999/2001 financial year and was hoping to break even in this financial year. But he did point out that NetFlorist had grown its turn-over from R800, 000 in 1998/1999 to R4 million in 2000/2001, making him optimistic for the future.

Apart from moving towards centralized sourcing, NetFlorist is also in negotiations with retailers, hoping to lure users into placing orders for flower deliveries from a catalogue in-store.

There is then, at least in NetFlorist's case, a move to a bricks-and-clicks model, predicted by many as the emerging dominant business-model of the future.

From all this it would seem that the South African B2C market is in line with international trends, is not "doomed" and that the online consumer is beginning to trust. But things are still tense with no room for complacency, as indicated by Bacher's answer to our first question: "Yes, thank God, Mother's Day was successful for us."

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