Clustered e-commerce platforms and the location choice of home-based businesses in South Africa

Abstract

E-Commerce in South Africa was estimated to be worth US$3bn in nett sales during 2019 and is expected to grow at 13% on average up to 2024 (Deloitte, 2021). This growth is largely driven by marketplace e-commerce platforms eg., TakealotTM. Marketplace e-commerce platforms provide a cluster environment for third-party sellers to trade their products and services on their platforms. Home-based businesses are also showing a growth pattern. Access to the internet and other technology has better enabled the home to have access to marketplace ecommerce platforms which is sometimes referred to as clustered e-commerce. The study shows why it is justifiable to call marketplace e-commerce, clustered ecommerce by demonstrating that it has all the elements of a cluster. The study mainly focused on the impact clustered e-commerce has on the location choice of home-based businesses in South Africa. The study assessed the common elements that make clustered e-commerce a preferred location choice for home-based businesses in South Africa. The study measured how clustered e-commerce in South Africa has influenced levels of trust amongst home-based businesses as well as understanding the economic factors that play a role in the location choice decision. Results show that levels of trust and marketplace e-commerce elements have a significant influence on the location choice of home-based businesses. Economic factors did not seem to have a significant impact on the location choice of home-based businesses that trade on marketplace e-commerce. The study recommends that the research be replicated with a larger sample. Marketplace e-commerce platforms need to comply with the legislation compelling them to make the full details of the seller visible. This would make the population visible in order to sample.