Online Retail in South Africa 2019

The “Online Retail in South Africa 2019” report:

Local online retail goes mainstream and is set to pass the R14-billion mark this year, marking 1.4% of total retail

Online retail in South Africa is due to pass the R14-billion mark in 2018 as e-commerce begins to go mainstream. This is a key finding of the Online Retail in South Africa 2019 study.

The 2018 figure, which represents 25% growth over 2017, comes as a surprise, given predictions that online retail growth would slow down to below 20% by 2018.

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.

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. It is not unusual to see growth rates of between 25% and 50% reported by individual online retailers, with slightly more tempered expectations for 2019 and 2020.

Key online shopping highlights:

Online Retail Growth Speeds Up
Growth in Apparel Accelerates
China Rules Global Online Retail
Customer Centricity Wins


Waiting time for online deliveries to arrive in South Africa

Online tracking tool, Narratiive, has released its South African eCommerce report for 2018. The data is based on a survey of 7,909 South Africans between July and August 2018, with respondents asked questions focusing on their online purchasing frequency, their most commonly purchased products, and what stops them from shopping online.

The data showed that online shopping continues on an upward trend in the country, with 44% of offline shopper survey respondents saying that they anticipate making an online purchase in the next 12 months. In addition, 73% of online shoppers say that they’ve either maintained or increased their online shopping habit in the last 12 months.

What people are buying

The report found that books (10%), travel tickets (10%) and tickets for shows and sporting events (9%) were some of the most frequently bought items in the last 12 months.

Other popular purchases include:

  • Clothes and accessories – 7%
    Hotel reservations – 7%
    DVDs, videos, and music (including CD, K7, MP3’s) – 6%
    Health and beauty products – 5%
    Software – 5%

When asked how much they spent on their last purchase, 22% said that they spent between R200 – R499, while 19% said that they spent between R500 – R999 and R1000 – R2999 respectively.


When asked how long it took for their last purchase to be delivered:

  • 27% said between 3-5 working days
    27% said that their delivery was instant
    21% said between 1-2 working days
    15% waited for longer than 10 days
    10% said between 5-10 working days

While some consumers indicated that they were unsatisfied with these delivery times, the majority said that they were ‘very satisfied’ (61%) or ‘fairly satisfied’ (24%).

Part of this satisfaction is likely to stem from the fact that 58% of these customers were charged no fee for this delivery, while just 14% were charged a fee of R50 or more


Online eCommerce overloads as million of South African’s shop

No‚ say South African online retailers‚ who claim they are ready to fend off system overloads and crashes when thousands of shoppers look for bargains on November 24. Last year shoppers using ran into problems in the checkout process. This year‚ the online retail giant says it has prepared for five times the average payday traffic.

“Our checkout process ran into problems on last year’s Black Friday because the banks’ payment gateway fell over from the surge of online shoppers across the country. The combination of all the retailers running Black Friday sales meant that they simply couldn’t handle the volume of transactions – and we believe we’ve done everything we can to mitigate these challenges this year‚” said chief marketing officer Julie-Anne Walsh.

Fashion retailer has implemented a “feature freeze” to tackle possible glitches. “We have spent the last few weeks in the lead up to Black Friday preparing our systems which entailed a ‘feature freeze’‚ meaning we have not developed or deployed any new features but instead spent the time on scaling and creating a robust website that will ensure we manage the increased load of Black Friday‚” said managing director Grant Brown.

Spree’s Black Friday traffic and order volumes have grown by 100% per annum over the last four years. Last year it was one of the few e-commerce sites that did not fall over under the visitor load. “We plan well ahead to ensure that our infrastructure and platforms are able to handle the massive growth and the high peak of concurrent visitors. We have invested a significant amount of time and effort in upgrading and optimising our server capacity and our development team has focused on optimising key areas in the platform codebase‚” said Spree chief information officer Jonathan Muir.

The fashion retailer’s main concern for this Black Friday is the banks’ ability to process the onslaught of credit card payments. “But we have a few contingencies in place to mitigate that risk‚” Muir said. South Africa’s only digital credit product for online shopping‚ Mobicred‚ says its system was built to specifically cater for increased traffic.

eCommerce SA’s online retail worth over R9 billion in 2016

World Wide Worx predicts SA’s online retail market will be worth over R9 billion in 2016.
Local retailers are seeing a steady uptick in online shopping numbers as more South Africans embrace e-commerce.

In Pick n Pay and Mr Price’s latest results, both retailers showed strong growth in online sales.

Mr Price says its local online sales grew by 63.6% for the 53 weeks ended 2 April. Mr Price says the online business is now generating positive returns and all its MRP brands are now “full omni-channel retailers”. This as the group saw total revenue for the year grow over 8% to R19.6 billion.

In the year ended 28 February, Pick n Pay saw its strongest turnover growth since 2010. This included a 38% increase in turnover growth from Pick n Pay Online over the year, “with a stronger range and a substantial improvement in product availability”. The team says it is particularly pleased with the growth in demand from its business-to-business (B2B) customers.

“The online business in the Western Cape has benefited from the dedicated picking warehouse established at the Brackenfell Hypermarket last year, and the group will look to invest in a similar solution in the Gauteng region, towards the end of this year,” the group says.

In the 2015 financial year, Pick n Pay also delivered strong double digit e-commerce growth and added 40 000 new online customers.

The Foschini Group says it is investing in its omni-channel roll-out and will launch online sales for Foschini cosmetics, @home furniture as well as the Markham and Fabiani brands this year. This after its sports division brands −Totalsports, Duesouth and Sportscene − launched online selling in the past financial year, which the company says “proved to be successful with results ahead of expectation”.

Massmart says it continues to expand and improve its e-commerce offerings. These are primarily from its DionWired, Makro and Masscash Wholesale stores. Massmart’s results for the 52 weeks ended 27 December 2015 show online sales now represent about 2% of total sales in those categories that form part of the online offering.

“Makro’s customer card data indicates online shoppers continue to visit and shop our stores. We are delighted with the response to our new B2B online commercial customer offering launched in November 2015,” it says.

Massmart says a Massbuild online project “to serve the contractor and professional market” is also in the advanced stages.

Woolworths says food sales comprise the majority of its local online revenue, although stronger growth in clothing and general merchandise is now being experienced. In the 52 weeks to 28 June 2015, Woolworths’ Country Road brand’s online sales contributed close to 10% of total sales, up from 8% the year before.

Woolworths says it continues to invest in innovative digital development focused on digital accessibility and personalisation.

Source: Full Article SA retailers see e-commerce uptick
By Paula Gilbert

5 eCommerce retail trends to be adopted in the South African market

With so many shoppers and so much to offer, what are some of the emerging trends that e-commerce specialists noticed in international markets and how can they be adopted in the South African market?

Smartphones provide the ultimate gateway for internet users across the world. They provide consumers with market transparency and the possibility of anywhere, anytime interaction. In China, it’s estimated that 88.9% of internet users chose to connect through their mobile phones. A recent study, conducted by the German Scientific Institute
of Market Research (GfK), found that 26% of German shoppers compare prices using their mobile devices when visiting a store.

When it comes to South Africa, mobile has also had a significant impact within the market. Mobile penetration within South Africa is huge and smartphones are quickly gaining market share over feature phones. Mobile purchasing isn’t big just yet, but consumers are increasingly making use of it. Just take a look at one of our partners, HP Shop, with their total mobile visitor growth of 65%.

Digital currency
Digital currency, particularly Bitcoin, is emerging at quite a rapid pace within the online retail space. However, due to some scandals and security risks, many businesses are still wary of digital currencies. Despite this, there are many different forms of online monetary transactions coming to the fore, such as desktop wallets, mobile wallets and web wallets. South Africans, have in fact, become far more familiar with the concept of mobile wallets in recent years.

Interestingly, Africa and South Africa are more advanced in mobile payment systems than the US. This is thanks to payment methods such as QR codes or tap to pay, with 55% of South Africans saying they would be willing to use digital currency, according to the 2015 consumer study conducted by PwC. Credit card penetration within South Africa is relatively low. Digital currency could therefore bridge the gap between those who have a credit card and access to the internet versus those who have internet, but no credit card.

Same-day delivery
Let’s be honest, not everyone has the time to sit around and wait for their parcel to be delivered. Standard delivery will suit most consumers, with some willing to wait for a longer period of time, in order to get free delivery. That being said, there are many consumers who wish to have their parcel delivered on the same day. When it comes to delivery, a fixed date is the most popular choice, closely followed by next day delivery. PwC’s consumer study also found that 79% of South Africans are willing to pay for same-day delivery, which is why it’s important for retailers to have the logistical infrastructure in place to satisfy customers’ needs.

Click and collect
The concept of click and collect is very simple. The consumer will buy something online and collect it in their own time, often just a few hours later, rather than wait for it to be delivered three or four days later. It’s ideal for those consumers who are headed to a particular store but want to save time. One of the biggest attractions about click and collect is the certainty that your item will actually be there, waiting for you. This particular trend is very popular within the UK marketplace and it’s something which has the potential to become just as popular in South Africa.

The year ahead
Online shopping in South Africa as a standalone, is still relatively small. When it comes to the world of online retail, South Africa is still seen as being in e-commerce infancy but is growing at quite a rapid pace. Watson says that the ability for rapid growth is what makes South Africa’s market so exciting.

Because South Africa is lagging behind the rest of the world in online retail, we have the advantage of having other markets far ahead of our own going through trends before we do. It’s like the world is our testing ground. So the methods that have been successful across the globe are the ones that South Africa’s retailers should try first. It means a much higher chance of success

By Neil Watson on 18 March, 2016  Source:

Online Marketplace Bidorbuy Adds Bitcoin Payments

To eliminate the financial security issues a lot of African e-commerce users have suffered from, Bidorbuy, Africa’s largest online market, began accepting Bitcoin payments March 3. The integration of Bitcoin relieves e-commerce platforms from storing sensitive financial data on their local servers, reducing the risk of a data breach and leak of personal user information. By providing Bitcoin as one of its main payment methods, Bidorbuy aims to lead the growth of the e-commerce industry in Kenya and South Africa.

Bidorbuy has more than 700,000 items listed on its online marketplace and generates more than 30 million page views per month. It is the largest corporation in the South African and Kenyan e-commerce industry by market share and the size of userbase.

The e-commerce market of Kenya is growing at a rapid pace. According to the Communications Authority of Kenya, the data/Internet market in the country has grown exponentially since 2014, due to the increase in smartphone adoption rate and speed of bandwidth Internet connection across Africa.

“All sub-categories of data/Internet service demonstrated growth apart from the terrestrial wireless service which recorded a drop in the number of subscriptions during the quarter. This was as a result of the on-going migration of wireless subscribers to fiber network by some of the major data/Internet providers. Emergence of new markets such as e-Commerce will present a prime opportunity for the market to make a turnaround and begin to record growth as it provides physical delivery services for online transactions,” said the Communications Authority of Kenya.

The country’s e-commerce platforms, including the popular OLX online marketplace, have experienced a huge growth momentum in Africa. OLX Kenya manager Peter Ndiang’ui says the establishment of stable Internet connections and the emergence of affordable smartphones led the African e-commerce industries to achieve significant milestones over the past year, especially daily purchase volumes, market share over traditional markets such as the retail industry and the number of newly registered members on online marketplaces.

“All those services [available on e-commerce platforms] are having a huge growth momentum in Africa and specifically in Kenya. The biggest driver is the access to smartphones. Smartphones have become cheaper, and Internet access has spread with broadband spreading much more wider,” said OLX Kenya Manager Peter Ndiang’ui.

Visa South Africa General Manager Jabu Basopo explains that an increasing number of e-commerce platform users are starting to purchase more airline tickets and clothes online to eliminate the inconvenience of visiting retail shops or travel agencies at traffic heavy hours.

“If we look at the trends, the top three areas that are growing are electronics, fashion and airlines. However, each market differs. In some markets you’d see probably the airlines being number 1 [growing area],” said Visa South Africa General Manager Jabu Basopo.

Despite the rapidly growing clientele of many e-commerce platforms, one major issue with Kenya and other African countries’ online marketplaces that is restricting the potential expansion of the e-commerce industry throughout Africa is poor financial infrastructure and vulnerability of credit card payments.

Kenya’s leading online electronics marketplace Kilimall marketing manager Charles Mungai says a lot of users of e-commerce platforms have had their sensitive financial information and credit card data leaked over the past few years. Since e-commerce platforms manage centralized local servers or databases of sensitive user data and financial information, users’ credit card data are prone to hacking attacks and data breaches. If a hacker or a group of hackers gain access to an e-commerce platform’s servers, users’ financial data will inevitably become leaked.

“A lot of people have got themselves into very nasty situations because of issues with credit cards, fraud and financial insecurity. For example, you give credit card information on a platform that was not very secure and somebody takes that information,” said Charles Mungai, Marketing Manager of Kilimall.

The increase in financial fraud and consumer insecurity associated with credit cards and traditional means of payment have led a substantial part of Kenya’s population to refrain from using online payment tools in purchasing goods online. By incorporating Bitcoin into its online platform, Bidorbuy hopes to initiate a trend back toward e-commerce.

Joseph Young March 22nd, 2016