Mon | Dec 11, 2017

Online shopping market still tiny, but growing - Robinson takes virtual purchases to new level

Published:Friday | September 29, 2017 | 12:00 AMAvia Collinder
Khary Robinson, executive chairman of Norbrook Equity Partners.
An Exec Direct aircraft owned by the Clarkes, who also developed the ShipMe online shopping service.
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Internet subscriptions might have climbed to 65 per cent, as more Jamaicans spend time online at their computers and on smartphones, but only two per cent of them utilise the Web for shopping.

Still, heavy hitters within the e-commerce trade say use of the Internet for online purchases is growing at a robust 35 per cent per year - and in line with that trend, retailers are slowly investing more in online shopping platforms.

There are signs that the two groups - online shopping companies and retailers - are finding ways to partner

on e-commerce initiatives. It comes amid the latest telecommunications data reported by the Office of Utilities Regulation that about 1.78 million Jamaicans now subscribe to broadband.

"The amazing thing for the industry is that it has tripled in the number of purchases in the past two years and still is relatively small compared to the equivalent in the US," said Khary Robinson, executive chairman of Norbrook Equity Partners and head of Mailpac couriers, regarding the gains in e-commerce.

"Some 75 per cent of US households shop online, while only two per cent do so in Jamaica," he said.

So popular has online shopping grown in the US that some of its retail chains, such as Toys R Us and Payless ShoeSource, have been forced to the brink of bankruptcy. Meanwhile, shopping giant Amazon continues to grow, increasing its appeal to markets well beyond America's shores.

Typically, shoppers in Jamaica sign up with courier companies like Mailpac and are given a shipping address in the US to which packages, mail and other deliverables are sent. The couriers then ship, clear Customs, and hold the package for pickup at their local branches, or deliver the package to shoppers' homes or offices.

Local shopping websites

The online shopping market, Robinson hopes, will deepen with the introduction of Mailpac's new local shopping website, which is targeted at shopping within Jamaica.

Another entrepreneur with this in mind is Derrick Cotterell, the chairman and CEO of Derrimon Trading Company Limited, whose Sampars online grocery shopping portal is now responsible for five per cent of sales for the Sampars retail chain.

"It is growing and we are getting good traction from the diaspora," Cotterell said.

There is no known centralised data on ecommerce activity in Jamaica, and there is little indication that it is widespread - albeit that a number of small operators use their social media pages to market and sell their products.

But, more businesses are looking to the Internet as they seek ways to widen their markets, the latest being the GraceKennedy-owned grocery retailer Hi-Lo Food Stores. Last week, Hi-Lo manager Renee Nathan disclosed that the company was developing an online shopping platform to be rolled out next year, and was doing so in collaboration with different partners.

Robinson indicated that his company is one of them.

The number of courier companies has grown fourfold from 10 just a few years ago to 40. But Robinson says they are largely small providers.

One of the more low-key but fast-growing exceptions is ShipMe, which is now considered a medium-sized operator and a serious rival. The company is operated by the Clarkes, the same family that founded the Exec Direct cargo airline service, but the owners maintain a low profile and have consistently refused interviews or otherwise avoided calls.

Tara Couriers, which has developed Tara USA, an online shopping and package-forwarding service, is another contender. Responses promised by Tara were unforthcoming up to press time.

Robinson, meantime, claims market supremacy.

"Mailpac still dominates the industry with approximately 65 per cent of the entire market served from 12 locations spread across the island. Most providers, he said, "are just shipping companies that give you an address to send your online purchases to".

Grocery shopping appears to be one of the more popular areas in which Jamaican online shoppers are willing to spend their money locally, with Robinson noting that the best spenders among them are customers of club shopping group PriceSmart Jamaica, who like the items it stocks but are often inconvenienced by the cash-out lines inside its single outlet in Kingston.

"More specifically, people have a number of choices when it comes to grocery stores and the lines at the grocery stores are not terribly long. More importantly, their usual supermarket is generally close to their homes," said Robinson.

But: "PriceSmart is quite the opposite for them. Accordingly, having the ability to sit at home and do all their PriceSmart shopping and have it delivered to their door has allowed them a unique level of convenience and flexibility, because they no longer have to drive to PriceSmart and face the parking and the lines."

Attempts to reach PriceSmart for comment were unsuccessful up to press time.

To encourage more Jamaicans to do their shopping remotely, Norbrook has developed a web-based shopping platform called Mailpac Local that uses technology developed by online grocery companies such as Amazon Fresh and Instacart, but customised to Mailpac's operation.

"This technology makes it quick and easy for shoppers to virtually browse the aisles of a store, seamlessly fill a shopping cart with goods, and have them delivered to their doorstep shortly thereafter," Robinson said, while noting that Mailpac is the only Jamaican company with the capability to direct customers to virtual shelves.

Effectively, that is the essence of the partnership he has struck with Hi-Lo, as well as PriceSmart and another company called The Stationery Centre Limited.

Mailpac Local accepts local cards as payment on the site or the customer can pay on delivery. The platform allows shoppers to 'walk' down the isles and drop things into your cart with one click, and it saves the most recent shopping cart, so weekly reordering "can happen very quickly", he said.

The current sites are mailpacshopclub.com, stocked by PriceSmart; mailpacgrocery.com, stocked by Hi-Lo and mailpacoffice.com, stocked by The Stationery Centre. Robinson said that his company is working with other retailers to deliver a similar online experience.

avia.collinder@gleanerjm.com