The Growth of E-Commerce in South Africa

Is the South African E-Commerce landscape growing? Definitely - although South Africa may be a little behind when it comes to online shopping, E-Commerce is making steady progress in the South African environment, with traditional retailers all starting to take on a web presence.

South Africa’s online spend is currently said to be hitting around 1.4% of total retail, with predictions of it hitting the 2% mark by 2022 – indicating great potential for growth and opportunity. In 2018 a report by the South African division of international market research, Growth from Knowledge, reported that SA’s E-Commerce retail market had grown by 52% in 2018 alone, thereby accounting for nearly 7% of total consumer spend.

Internet penetration of 50%, mobile penetration of 65%... and growing!

Internet penetration is around 50%, expecting to reach 60% by 2021, with mobile penetration around 65% and growing. This means that it is non-negotiable for retailers to embrace mobile commerce (m-commerce) going forward, especially as internet access is limited across SA and fixed-line infrastructure is poor. South Africa’s popular online fashion retailer, Runway Sales, say 60% of their members use mobile phones to shop during the week, rising to 90% on weekends.

What are the current market trends?

Top E-Commerce product categories in South Africa, according to Bizcommunity (2019), are clothing (53%), entertainment (games & event tickets)/electronics & media, with food (groceries, fast food), furniture & appliances coming in strong as well. An overseas trend that South Africans are set to follow is that of direct-to-consumer (D2C), as shown by the success of Runway Sale’s business model of a free, members-only shopping platform that provides customers with designer brands at affordable prices.

E-Commerce payment option trends

Research shows that South African online shoppers prefer paying cash on delivery (COD) or using credit cards. However, as only about 13% of South Africans (15yrs+) own a credit card, South African online stores must offer a variety of secure payment options ie: debit card, EFT, Paypal and especially, COD. This ensures that online shopping remains accessible to all South Africans.

SA 1 of top 3 economies on the rise, worldwide, for B2C commerce

A report by Searchlaboratory.com puts South Africa in the top 3 economies that are on the rise in B2C (business-to-consumer) commerce as predicted from 2018-2022. To summarise, it seems that it is not so much a question of “Will South African E-commerce grow?” but rather one of “By how much will South African E-Commerce grow?”. The numbers seem to speak for themselves, showing that it makes business sense to get up and running in the E-Commerce world!

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