Ecommerce Marketplaces vs. Direct to Consumer Ecommerce: Everything You Need to Know

Ecommerce in South Africa is constantly evolving thanks to the influence of global trends and tech advancements. For SMEs, this presents both challenges and opportunities. 

Ecommerce marketplaces like Takealot, Bob Shop and the anticipated Amazon provide SMEs with powerful platforms to reach a broad audience. These marketplaces aggregate products from various sellers, offering customers a one-stop shop for their needs. 

The D2C model allows businesses to sell directly to consumers through their own websites or mobile apps, bypassing third-party retailers. This approach is gaining traction among brands that want to build a direct relationship with their customers.

Choosing between ecommerce marketplaces and D2C

For SMEs, the choice between an ecommerce marketplace and a D2C approach depends on several factors including the type of product, target audience, and business capabilities. 

Here’s a closer look at some of the benefits of marketplaces:

  • Increased brand visibility.
  • Easier and less costly than building an ecommerce site.
  • Consumers often feel more comfortable purchasing from a well-known marketplace.

But, it might not be all that it’s made out to be for SMEs.

The alternative: Direct to consumer ecommerce

SMEs often find significant advantages in adopting a direct-to-consumer (D2C) model over selling through marketplaces. What’s more, studies show that 50% of consumers prefer the D2C approach because they identify with the authenticity behind the brands they support.

Some other benefits include:

  • The ability to build a strong brand
  • Complete control over pricing strategies
  • Flexibility to quickly adapt to customer feedback
  • The ability to offer customised products or services
  • And most important of all, owning your own data and building a database for repeat sales, upselling and loyalty. 

Strategic ecommerce solutions

Regardless of the route you choose, the key to building a strong foundation for any ecommerce business is to secure a functional website, a delivery partner and a trustworthy payment provider. That’s why iKhokha, Stone Hut Designs and BobGo have teamed up to offer SMEs an end-to-end ecommerce solution. 

iKhokha helps SMEs make it easy to accept online payments, with tools that integrate seamlessly with Wix, WooCommerce and Shopstar sites, including a custom payment API.  The fintech focuses on making financial transactions straightforward and efficient, which makes them a great choice for small businesses wanting to grow online.

BobGo supports SMEs by managing the tricky parts of logistics like storage, distribution, and order fulfilment, letting businesses concentrate on expansion over admin.  

Thirdly, Stone Hut helps SMEs build and improve their websites, ensuring they attract and keep customers. They use the latest technology to help businesses create excellent online shopping experiences, which is key for success in the digital market.

For SMEs, the key to success will lie in their ability to adapt and strategically choose between – or blend – the marketplace and direct-to-consumer models. Amazon’s planned entry into South Africa is already set to shake up the local ecommerce ecosystem. Embracing innovation and focusing on customer experience will be crucial as South African SMEs navigate this new, dynamic era of ecommerce.