Ecommerce adoption by small medium enterprises in fashion : the case of Durban fashion fair designers

Abstract

Small Medium Enterprises are one of the country’s engineers for transformation through economic growth, innovation and employment creation. The fashion industry is rated the second largest manufacturing curbing unemployment for both formal and informal sectors of fashion through providing one of the human basic needs. Due to the low entry barriers, the competition is rife both locally (other fashion designers) and internationally (imports) which has led to initiatives such as ‘fast fashion’ which represents the process of selling designs showcased on the catwalk in stores in the shortest possible. However, this is a challenge without the right platforms to advertise and sell the clothing. Initiatives such as Durban fashion fair have been good in providing the Durban designers with a local platform to showcase but Small Medium Enterprises greatest challenge is that Durban market is flooded despite designers offering niche products because it’s the same customers with limited income to buy the offerings, such that customer acquisition beyond the confines of the Durban is a necessity for business sustenance. Durban fashion designers are creative business people, knowledgeable in the fashion industry, however with the challenges that they are facing, there is limited research of their use of ecommerce in solving the stated problems. Ecommerce is perceived as an innovation that has transformed Small Medium Enterprises is developed nations such as China and America however the case is unknown for developing nations such as South Africa. The purpose of the case study is to determine how far the fashion designers have used ecommerce in their businesses and the factors that influence them to adopt taking into account the benefits and challenges that they face. The case study encourages multiple sources and techniques to gather data. Mixed method approach was conducted for data collection, for the Durban fashion fair designers quantitative study was undertaken while the Durban fashion fair management were interviewed. The data was analysed using statistical method SPSS and use of thematic analysis for quantitative. Results from the study supported the literature while other results revealed gaps for further research. The study revealed the following results, that the majority of fashion SMMES are cognisant that the South African population is moving to online buying and that there are business opportunities to be exploited online. Secondly, the challenges hindering the fashion SMMEs was the low profits and internet fraud. The findings revealed that the greater percentages of fashion SMME are survivalist entities earning profits of less than 50 000 rand annually. The low profit margin affects the acquisition of gadgets and infrastructure is deemed costly; moreover the SMMEs lack the financial collateral security to borrow from the banks. The other challenge mentioned was that internet fraud was the lack of digital training literacy and training such that fashion SMME perception of internet fraud was exaggerated. Thirdly, the results highlighted that the management benefited from the adoption by making better decisions. The better decisions can be attributed to knowledge of customer, the promptness of making decisions and the management’s previous online experience. Fashion SMME highlighted the benefits accrued from implementation of effective ecommerce practices, were increase in sales despite the number of years the business has been trading. The use of ecommerce, the results indicate that the fashion designers use free applications available since their profitability margins are low. Most of the SMME advertise on the social media Facebook and Instagram, they also use the social platforms for product research and prevailing trends too. And lastly they use banking applications to make payments to suppliers as well as receive payments from customers. The fashions SMME have not adopted ecommerce by using second parties such as paid second party sites.