South Africa’s “essential services” definition is hurting tech businesses

The nationwide COVID-19 lockdown has been a significant challenge for businesses operating in South Africa.

Many technology companies are struggling due to the government previously labelling hardware and gadgets as non-essential goods – except in the case of higher education and essential service providers.

Despite this, tech companies have seen growth areas in the lockdown as it will accelerate society’s digitisation.

MyBroadband spoke with technology companies operating in South Africa about how the lockdown is affecting them.


ASUS

ASUS South Africa Country Manager Tolga Ozdil said the lockdown has posed several challenges to its South African business.

One of these is being unable to sell its products to businesses and organisations not covered by the government’s higher education or essential services definitions.

“This differs to the global rulings and therefore globally, ASUS has seen an increase in sales volumes due to the number of people working from home and homeschooling becoming the temporary norm,” said Ozdil.

The South African market is proving to be challenging, however.

“We are trying to assist as best we can via online marketing to ensure that ASUS remains in the mind of our consumers and we are planning for the influx of service requests we will receive once the lockdown is lifted,” said Ozdil.

Ozdil said that due to being a leader in the tech industry, ASUS staff have the tools necessary to work from home.

“The lockdown has forced us to be more creative and convert our physical events to the digital landscape,” said Ozdil.

“With unknown times, comes exciting and new possibilities. The teams are working well and although it is challenging due to the fact that we cannot retail, we are planning ahead to ensure that we can hit the ground running when the lockdown is lifted.”

Ozdil believes an increase in sales directly after the lockdown is lifted is also likely.

We are anticipating a major spurt in sales subsequent to the lockdown being lifted as it is predicted that COVID-19 will still require people to practice social distancing and remote working for some time,” said Ozdil.

“This will be the ‘new normal’ for quite a while and we are ready to help our retailers and e-tailers as best we can.

ASUS ZenBook Duo 3

ASUS ZenBook Duo 3


Acer

Acer Africa General Manager and Head of Consumer Business Glenn Du Toit said the lockdown has been particularly difficult for computer vendors, because while it has become evident how important it is to have a computer in one’s home, vendors are largely unable to service this need.

While Du Toit confirmed this was impacting Acer’s business, he said it was somewhat offset by trading from December to March being “unbelievably buoyant”.

“We do expect a reduction in the ability to host physical launches, activations and events – however, the lockdown will by no means stop us from moving forward aggressively to bring the latest Acer products to the South African market,” said Du Toit.

“Our team remains resolute and as a leadership team we will are working extra hard to protect all our internal and external stakeholders through this turbulent time so we can emerge stronger than we were when we entered.”

Du Toit acknowledged that restarting after lockdown will bring challenges.

“Added to the momentum being halted, we are going to be dealing with massive price increase due to the spike in the exchange rate that will filter into the market,” said Du Toit.

This, combined with the investment downgrade, mean that the PC industry’s concerns will relate more to affordability than demand.

In the short-term, Acer believes there will be a split in market demand.

While the lower-end market is expected to surge over the next 12-18 months, users in the medium-to-high-end of the market are predicted to, in the short-term, choose devices with slightly lower specifications than they would usually do.

In the long-term, however, Acer believes technologies such as SSDs and Wi-Fi 6 will drive customers back into the mid-to-high-end market.


SqwidNet

SqwidNet MD Phathizwe Malinga said the lockdown has shown that businesses are not in competition.

Instead, Malinga believes collaboration is the only way to generate value for society.

“We have seen the government and private sector come together, we’ve seen traditional competitors like retailers pool their resources together to ensure society’s needs are met in these tough times,” said Malinga.

This collaboration has made SqwidNet’s goals easier to achieve in the long-term, Malinga said, because the “digitization imperative” has become real to many businesses, and SqwidNet is best positioned to enable and enrich this.

“Driving innovation through IoT will ultimately be good for our business,” said Malinga.

Malinga acknowledged, however, that if a longer lockdown is implemented, SqwidNet’s sales in the short term will be impacted.

Despite this, Malinga said that the combined purpose of the CIVH group – which also includes DFA and Vumatel – is to leave a legacy.

“We do not want our legacy to be that we cut people’s salaries when they needed it the most,” said Malinga.

“We pray that our combined efforts prevent such scenarios from playing out for as many South Africans as possible.”

SqwidNet

SqwidNet


Now read: We should be able to sell non-essential products – Takealot CEO

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