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Online shopping hit the R14 billion mark in South Africa with 1.4% of overall sales in the country despite persistent apprehensions about its safety.
Online shopping hit the R14 billion mark in South Africa with 1.4% of overall sales in the country despite persistent apprehensions about its safety.

Online shopping hits R14bn mark in SA

RETAILER NEWS

By Dineo Faku - Nov 5th 2018, 08:44

Online shopping hit the R14 billion mark in South Africa with 1.4 percent of overall sales in the country despite persistent apprehensions about its safety. 

A study by mobile and tech research group World Wide Worx and Visa and Platinum Seed found that online shopping would to surpass the landmark as e-commerce begins to go mainstream.

The study, called Online Retail in South Africa 2019, surveyed a total of 75 big companies.

It found that safety remained a significant concern as one in five consumers said they were victims of payment card fraud.

The study found that there were 21 million internet users in South Africa meaning every second adult South African was connected.

It said e-commerce was still not a major element of South African retail in general, and the report hopes there will be growth in online shopping.

The research said that the growth had beaten market forecasts.

It represented a 25 percent growth compared to 2017, and comes as a surprise, given predictions that online retail growth was expected to slow down to below 20 percent by 2018, the report said.

“Forecasts have been beaten as a result of massive investments in online retail, aggressive marketing, and the rapid uptake of new shopping channels like mobile shopping and Instagram,” the study found

“Further, most established online retailers have enhanced their digital presence, and refined their fulfilment models, while many traditional retailers are starting to see significant growth in their online offerings.”

The study found that consumers spent R1-trillion through traditional channels in 2018, with the research expecting online sales to reach the 2 percent mark by 2022.

It has forecast that, from 2018 to 2020, show online retail sales would more than double, to almost R20-billion, a year sooner than originally forecast in 2016.

“Online retailers in South Africa still make up a small proportion of overall retail, but for the first time, we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature,” according to the report.

But South Africa still lagged behind in online shopping compared to China where online shopping accounted for 19.6 percent of total sales.

Home Choice retail chief executive Leanne Buckham said the company had embarked on a huge promotional drive in promoting internet shopping.

Buckham said, however, consumers often worried about safety.

“There is still a barrier to online shopping. People are nervous that there is someone out there who will scam them of their card,” said Buckham, adding that oversees the barrier was gone.


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