Subscription e-commerce / commerce is something that I find fascinating.  When I wrote about it in September 2011, I must confess I wondered whether the vertical would be making an appearance in South Africa. (The change in date to my initial post is related to an issue I had in middle January 2012)

Globally the vertical is at the moment in a transition. Some like Shoedazzle have gone to pure ecommerce and in March I started thinking that the model was in trouble. Truth is that I think the exceptional startups like Birchbox is going into a more mature phase and are starting to add additional channels to their offering. (Another gender or more products to pick from)

Brian O’Malley writing for All Things D states why this vertical is attractive for investors:

Investors love the concept of repeatable revenue, but with high churn rates and the ability in several models to skip deliveries, retention may be only a function of how hard sites make it to cancel.

So, it all sounds like this a vertical with potential right? I think so, but the founders of the companies need to their homework and ensure that their offering is capitalizing on the laziness of their users. The counter to that is to produce an experience that is one that rewards the user for being a member of subscription service (more on this in a bit).

So what has happened in South Africa?

Well for starters, I have found 5 different startups in this space that cater for 3 different areas.

The five companies are:

Glambox – The Johannesburg based company focuses on cosmetic samples for both women and men (The Box For Men). R100 per month.  The men’s box is done every 3 months at a cost I have not been able to determine.

Glossybox – Part of Rocket Internet South Africa. They are based in Cape Town and focus on cosmetic samples for women.  R130 per month

Rubybox – They are also based in Cape Town and focus on cosmetic samples for women and men. R100 per month, Manbox is R150 per month. Rubybox also does market research for brands.

Lingerieletters – They are based in Cape Town and cater for ladies underwear. My research shows that this is part of a ladies online fashion store which makes sense. R95 per month.

The Ooh! Box – The Ooh! Box is a curated taste club with a membership limited to a 1000 members. R495 per month and they really surprise you every month, I can attest to that. Members are locked in for 3 months and then they can decide to end the subscription service.

The issue I have at the moment for these start-ups is scale. South African ecommerce is growing and these businesses need members to retain membership for it to be a profitable exercise. Can they be profitable since day one and secondly, how long until user fatigue leads to a drop in revenue potential?

Update: Rubybox has raised a round of funding from Hasso Plattner Ventures Africa and have acquired GlamBox to become the marketleader in the online beauty box market in South Africa.