New data from Gumtree reveals that community capitalism made possible by online classifieds platforms could stimulate South Africa’s ailing economy by unlocking more than R9,66-billion in value.
According to Gumtree, the 14,4-million items listed on its platform between mid-2019 and mid-2020 (excluding cars and homes), had a potential trade value of R9,66-billion with sales over this period keeping cash circulating in the South African economy, while improving sellers’ cashflow. This value is higher than the GDP of Tonga and six other countries.
“South Africans have approached the lockdown restrictions arising from the Covid-19 pandemic with their characteristic ‘make a plan’ ingenuity, with buyer and seller behaviour shifting dramatically from brick and mortar environments to connecting and unlocking commercial opportunities online,” says Aileen Seth, head of products and product experience at Gumtree.
“Our unique country is a case study in economics as formal and informal trade sectors co-exist within our market, continually exhibiting developed and emerging market characteristics from the stock market to stokvels and everything in between. This is being amplified as more people understand and embrace the potential of online as a channel to sell anything and everything,” she adds.
Claire Cobbledick, GM of Gumtree South Africa, adds that online classifieds provide two-way commercial opportunities: for sellers wanting to start a side hustle or convert their part-time work to a full time business via online trade, and for buyers looking to unlock the benefits of new or second hand bargains.
“During lockdown we saw the emergence of digital services such as tutors, personal trainers, yoga instructors and offerings that were previously exclusively offered in brick and mortar environments,” she says.
“Now that South Africans have been exposed to the potential that online selling can afford them, while benefiting from the reduced barriers to entry of selling this way, we are excited about the increased potential of community capitalism and how much online commerce automatically expands a sellers target market and customer base.”
The surge in online classifieds’ popularity is a growing global trend – eBay recently concluded a deal with Adevinta, Europe’s biggest digital marketplace specialist, which saw Adevinta acquiring eBay Classifieds Group. eBay is set to receive $2,5-billion in cash and becomes Adevinta’s largest shareholder with 44% equity stake.