McCarthy Online is not your traditional e-commerce venture. Instead of insisting on cost-effective credit card payments the company`s Megashopper concludes most of its business via telephone. Megashopper started off selling groceries, traditionally thought the most difficult market to enter online. Now MacCarthy Online MD Lourens Botha says the next step may be granting franchises in areas not already covered by its operations in Gauteng, Durban and Cape Town.
"We are just thinking about it," Botha says. He envisages home-type operations, or one man and a delivery vehicle. "It could work anywhere we have a supplier," he says. As the fifth largest retailer in the country in terms of sales and with 1 200 retail outlets, the McCarthy Group has a broad geographical presence. It would be a simple matter, according to Botha, to divert online orders in an area to a franchise holder there. "The major problem at this point is quality control when you use outside people. It takes just one bad franchise holder to give you a bad name."
McCarthy Online consists of four divisions, the most successful being Call-A-Car. With a claimed turnover of between R18 million and R20 million a month, Call-A-Car is profitable according to Botha. But only 30% of the cars sold are done so through the Internet. The majority of the business is still conducted via telephone, although the company plans to change that soon. "Internet transactions are much more cost effective," he admits.
Call-A-Car has big ambitions. "We want to be the Amazon of car retailing in SA," Botha says. "We are not offering vehicles cheaper yet, but we are working on it." A large part of the division is modelled on the business Jeff Bezos created, with customer service seen as a prime consideration. A partner program reminiscent of that used by Amazon will be launched next week. Partner sites will receive a rebate for referrals and call-a-car partners could even receive commission on sales made through their sites.
General retail site Megashopper claims an average order of R595, with just under 6 000 customers registered. "Megashopper is not a shopping portal," Botha says. Instead of creating a mall-type environment the site follows a "one till one bill" philosophy. Products from traditional retailers are offered for sale and fufillment is done through the normal Megashopper channels, but no distinction is made between products. The site plans to develop this "transactive advertising" business into a full-fledged revenue stream.
Brand Pretorius, CEO of parent company McCarthy Retail confirms that McCarthy Online may be considered for a separate listing in the not-to-distant future. "That is why we must also be profitable in the medium term," Botha says. "We believe this company has excellent separate listing potential." Such a listing could happen in as little as two years, he says.
McCarthy has smelled blood, saying it is already showing a profit on the R10 million invested in Megashopper and Call-A-Car. Now it wants more. "In the long term e-commerce will go mainstream," Pretorius says. "It adds a new sales channel and opens new markets. We want to be there."
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