The recent closure of Snatcher, a well-known South African e-commerce platform, sent ripples through the local online shopping space.
The CEO of Snatcher, in an interview after the closure, highlighted a number of key issues that contributed to their downfall. Among them were the company’s reliance on Google Ads as their primary traffic source and competition from emerging platforms like Temu. However, blaming Temu for Snatcher’s collapse overlooks deeper, more systemic problems within the business.
Snatcher’s Collapse: More Than Just External Competition
Snatcher was once a thriving platform in South Africa’s growing e-commerce landscape. It was known for offering a wide range of products at competitive prices. But when the CEO shared details after the closure, it became evident that internal issues had been ignored for too long. One of the most telling admissions was that 60-70% of Snatcher’s revenue came directly from Google Ads. This heavy dependence on paid traffic left the business extremely vulnerable.
What’s even more striking is that despite the competition from Temu, it wasn’t the real cause of Snatcher’s problems. Consumers had been complaining about the platform’s poor service long before Temu became a player in the market. Snatcher’s downfall had more to do with internal mismanagement, unaddressed customer complaints, and a lack of diversification in their marketing strategy than competition from Temu.
The closure should serve as a reminder to other South African businesses: no matter how fierce the competition, internal issues like poor customer service and reliance on a single traffic source will sink a company faster than any external threat.
The Danger of Relying Solely on Google Ads
One of the biggest lessons from Snatcher’s collapse is the danger of relying too heavily on Google Ads. Paid ads are an effective way to drive traffic and generate sales, but they should never be the sole source of traffic for any business. When a company puts all its eggs in one basket, it leaves itself vulnerable to fluctuations in ad costs, changes in platform policies, or account suspensions.
Google Ads costs have been rising consistently over the past few years. This is particularly true for e-commerce, where competition for key search terms can drive up the price of clicks significantly. For Snatcher, this meant that their primary customer acquisition channel became more expensive over time, squeezing their margins and leaving them with little room to adapt.
Even more dangerous is the fact that issues with a Google Ads account can have an immediate and devastating effect on revenue. Whether it’s an account suspension, a violation of Google’s advertising policies, or simply a technical glitch, losing access to paid traffic for even a few days can cripple a business that relies solely on ads.
The lesson here is clear: businesses should diversify their traffic sources. Google Ads is a great tool, but it should be one part of a broader marketing strategy that includes organic traffic, social media engagement, email marketing, and direct traffic.
Missed Opportunities in SEO and Social Media
Snatcher’s failure to invest in SEO is another glaring issue that contributed to their downfall. SEO, or search engine optimization, is a long-term strategy that can generate consistent, organic traffic without the ongoing cost of paid ads. While SEO takes time to build, the rewards are substantial. A strong SEO strategy helps a business rank well for relevant search terms, which means customers can find them without the business having to pay for each click.
Research from Ahrefs revealed that Snatcher’s SEO performance was lacking. This was a major missed opportunity. Had Snatcher invested in building their organic search presence early on, they could have generated a steady stream of free traffic that would have provided a cushion when Google Ads became more expensive.
Building a solid SEO strategy involves optimizing for the right keywords, creating valuable content, improving the user experience on the site, and gaining backlinks from authoritative websites. Snatcher could have benefitted immensely from focusing on SEO alongside their paid advertising efforts.
Platforms like Facebook, Instagram, and TikTok offer businesses the chance to engage directly with their customers, share product updates, and build a loyal following. Had Snatcher invested more in social media marketing, they could have created a steady stream of traffic from organic social posts and paid social ads, further reducing their reliance on Google Ads.
Customer Experience: The Real Problem Behind Snatcher’s Demise
While marketing plays a significant role in a company’s success, no amount of traffic can save a business that fails to deliver on customer expectations. Snatcher’s poor handling of customer service issues was one of the biggest contributors to their downfall. A quick glance at their online reviews reveals a host of problems
In today’s competitive e-commerce landscape, customer experience is everything. Negative reviews can spread like wildfire across platforms, damaging a brand’s reputation and driving potential customers away. Snatcher’s failure to address these reviews or make improvements to their service led to a steady decline in customer trust.
Customer service is one of the most critical aspects of running an online business. Customers expect timely responses, reliable delivery, and quality products. When these expectations aren’t met, they take their business elsewhere. In Snatcher’s case, it seems they neglected these essential aspects, which allowed competitors like Temu to swoop in and capture market share.
The lesson for other businesses is simple: customer experience should always be a top priority. A company that delivers exceptional service will build a loyal customer base that keeps coming back. Moreover, actively managing online reviews by responding to complaints and addressing issues can help mitigate the damage from negative feedback.
Temu: A Convenient Scapegoat
Temu, a Chinese e-commerce platform, entered the South African market in early 2024 with aggressive pricing and free shipping offers. Like Shein, Temu has been able to offer products at prices that are hard for local retailers to match, thanks in part to the scale of its operations and the ability to exploit tax loopholes. However, it’s important to note that Temu is not solely responsible for the collapse of businesses like Snatcher.
The claim that Temu’s entry was a significant factor in Snatcher’s closure overlooks the real issues. While Temu did add pressure to the market, Snatcher was already suffering from poor customer service, bad reviews, and an over-reliance on Google Ads. The presence of Temu merely accelerated a decline that was already in motion.
Key Lessons for E-Commerce Businesses in South Africa
The closure of Snatcher offers several important lessons for other e-commerce businesses in South Africa. Here are some of the key takeaways:
Diversify Traffic Sources
Relying too heavily on a single traffic source is a recipe for disaster. Google Ads is a powerful tool, but it shouldn’t be the sole driver of traffic. Businesses should invest in building a balanced marketing strategy that includes organic search traffic through SEO, social media engagement, email marketing, and direct traffic. By diversifying traffic sources, businesses can protect themselves from fluctuations in ad costs or issues with their paid accounts.
Focus on Customer Experience
No amount of traffic can save a business that fails to deliver a positive customer experience. Poor customer service, slow delivery times, and low-quality products will drive customers away faster than any marketing strategy can bring them in. Businesses must prioritize customer satisfaction by delivering quality products and responding quickly to customer concerns.
Don’t Blame External Factors
While platforms like Temu do create competition, businesses need to focus on what they can control. External competition will always exist, but the key to long-term success is improving internal operations and customer satisfaction. Blaming external factors for business failures is an excuse that distracts from the real issues.
By learning from Snatcher’s mistakes and applying these lessons, South African e-commerce businesses can build more sustainable and customer-centric platforms that are better equipped to compete in an increasingly competitive market.