Real Estate Investor Magazine South Africa May/June 2019 | Page 18

COVER STORY
kitchen products, in South Africa, and with no money for
marketing, the only person who visits the site is your mom.
Our primary marketing strategy was providing great products
and remarkable service (like a hand-written card and free
delivery with every order), but word-of-mouth only works
when enough people have had their first experience. We grew
quickly, but it was off of a tiny base,’ says Smith.
According to Smith, malls are (generally) a safe place to
take the family, meet friends, be entertained, eat out, as well as
shop. ‘We mustn’t think that shopping online will replace all the reasons that South Africans go to malls,’ he says.
South African shopping centre trading performance
continues its recovery since bottoming out in the fourth quarter
2017, according to the MSCI South Africa Quarterly Retail
Trading Index. This recovery is driven by Super Regional and
Community Malls. For the year ended December 2018, these
centres recorded a trading density growth of 2.5%, well off
the lows of mid-2017 when growth bottomed out at -6.6%,
according to the March Retail Trends Report by the South
African Property Owners Association (Sapoa).
REIMAG’S Q&A WITH YUPPIECHEF
CO-FOUNDER ANDREW SMITH: customers huge discounts that helped overcome some of
the fear and apathy around ecommerce.
Why did you decide to launch Yuppiechef online (without
a physical store) 13 years ago?
ANSWER: Yuppiechef was started by Shane Dryden and
myself in a lounge in Cape Town, with no experience in
retail and no cash. Landlords weren’t going to give us
a lease, and we weren’t going to be able to afford one!
Ecommerce was a way of starting a retail brand from
nothing with little overhead cost.
Selling online also gave us a differentiator - we could list
more products from more brands than physical stores
could. Even though the number of people willing to shop
online was few, we could reach the whole country and
provide hard-to-find products.
How has the online retail industry changed since
Yuppiechef opened? There’s been a gradual take-up of
online shopping in SA – when did you start noticing this
shift and what can you attribute it to?
ANSWER: The growth in online shopping has been
consistent, both in terms of new people willing to
transact, and the frequency of transactions from existing
customers. We saw a significant shift in the market when
Groupon was pushing hard in South Africa and giving
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MAY/JUNE 2019 SA Real Estate Investor Magazine
At what point did you decide to add a physical presence to
your offering?
ANSWER: For a number of years we had customers
arriving at our offices wanting to buy products, and not
understanding why we couldn’t sell to them! Eventually,
we opened a small store connected to our warehouse,
and it did surprisingly well.
Even though our online sales had been growing steadily
for a decade, we still felt like there was a huge portion of
the market that weren’t shopping with us. Less than 2%
of retail transactions are online and, despite the growth,
that number is not going to be 100%, or even 10%, in the
foreseeable future.
In 2017 we decided to open our first store in a mall to test
the waters, and the reception was very good. It confirmed
our hypothesis that sometimes customers want to shop
online, sometimes they want to shop in a store, and
sometimes it is a fluid combination of both. Doggedly
sticking to pure ecommerce was not the experience our
customers wanted from us.
Quote from the conference: ‘It took more than two years
from August 2006 to get to R1m of turnover online.’ Could