South African retail has seen a significant shift in the last 10 years, with disruptive changes in the landscape. According to a South African eCommerce Insights report, approximately one-third of shoppers use e-commerce and another 6.5-million users are expected to be shopping online by 2021.
A recent Economist Intelligence Unit report used bespoke Canback consulting data to highlight countries and metro regions in the African continent with the biggest potential for e-commerce growth while highlighting key trends and developments in the market.
Top 6 takeaways
1. South Africa is a country primed to take advantage of the potential of e-commerce – mobile penetration rates are high, infrastructure is more sophisticated, and the middle class more expansive and willing to engage in online purchasing.
2. Still, the country lags behind the US and Europe in terms of e-commerce. World Wide Worx, a local technology research firm, estimates that global online spending surpassed R9-billion (US$610-million) in 2016, reaching the important milestone of 1% of the R900-billion overall retail market.
3. Online retail has been growing by more than 20% per year since 2 000. A 2015 study by Ipsos revealed that 22% of South African internet users said that they had made purchases online and 48% expected to do so in future.
4. Many South Africans engage in cross-border shopping. In 2016, around 43% of South Africans shopped across borders.
5. Mobile penetration and infrastructure are advanced in South Africa compared with the rest of the continent. The market has reached maturity, with a penetration rate that is forecast to rise to just under 197% by 2021.
6. This rise is likely to be fuelled by the demographic shift of greater numbers of black South Africans joining the ranks of the more affluent, with greater disposable incomes.