The Covid-19 pandemic has spurred business model innovation in various sectors across businesses as consumer behaviour shifted and drove the increased uptake of online sales.

A new study, conducted by World Wide Worx on behalf of PayPal and FNB, revealed that many small and medium-sized enterprises (SMEs) went online in response to the pandemic, extended the number of payment methods they offer and started looking to international customers.

Nine out of ten SMEs established an online presence, with more intending to follow suit, the report, ‘South African SMEs’ digital response to the pandemic, and the role of cross-border transactions’, found.

The results show that online shopping is well-entrenched among local consumers, with 79% of the respondents reporting that their customers are more comfortable shopping online and making online payments since the pandemic started early in 2020.

“Nearly two-thirds (64%) of businesses have introduced more online payment methods in response to the pandemic, enabling more customers to pay through the methods they want. Another 22% intend to introduce more methods,” says World Wide Worx CEO Arthur Goldstuck, who led the research.

“This speaks to the maturing of the sector and businesses’ drive to provide their customers with the payment methods they prefer,” adds PayPal Africa sales development director Mark Mwongela Ngungi.

The study found that accepting orders through online shopping carts has had an overall business impact on 71% of responding businesses, showing the power of automation that e-commerce platforms can provide.

Seventy-four percent of businesses have started automating their activities in response to the pandemic, the study shows.

“This is known to increase customer service and decrease costs, which is why a further 17% are intending to make the shift,” Goldstuck comments.

Almost a third of the businesses surveyed have started targeting international customers since the pandemic started; however, four in five, or 79%, of South African businesses do not sell their products internationally.

Further, more than four in five businesses say their customers are generally comfortable when shopping from online stores, but this drops to under half when asked the same question about international stores.

“Operating internationally can be challenging for small businesses, which lack education on market opportunities outside South Africa’s borders, are not familiar with fulfilment methods and need to become more comfortable with global payment methods,” says Ngungi.

The study features data and insights from about 400 local SMEs.