Ecommerce in South Africa- Just How Big is It?
The South African ecommerce industry has shown great growth in recent years. The opportunities are ripe, as more and more companies are not only expanding across the nation, but also into Africa as a whole.
The South African ecommerce market is growing at a rapid rate.
This can be attributed to the fact that South Africa’s middle class is growing by leaps and bounds, creating a boom for the eCommerce industry here and abroad. There are many factors contributing to this trend:
- A number of large corporations have entered or re-entered the country’s retail landscape over time (e.g., Walmart)
- Online shopping has become increasingly popular due to increased internet penetration rates among consumers
- People who have access to social media and other technologies tend towards purchasing products from sites like eBay and Amazon instead of going out into town where they must pay exorbitant prices for them (~40% markups).
South African eCommerce market situation
The South African ecommerce market has grown substantially over the past few years. The market size and growth of the industry are driven by factors like population growth, urbanization, changing lifestyles and increasing smartphone penetration.
According to Statista’s data on ecommerce in South Africa for 2019, total sales on the South African ecommerce platform grew from $6 billion USD in 2016 to $15 billion USD in 2018 (with a predicted annual growth rate of 15%).
The majority of online shopping is done on desktop computers (69%), followed by mobile phones (19%) and tablets (11%).
What is driving ecommerce in South Africa?
As a country with a diverse population, South Africa is home to many different cultures and languages. This has meant that ecommerce has gained an important role in the country’s economy.
In South Africa, ecommerce is used as a way to reach customers who live in remote areas where traditional retail stores are not available. Ecommerce can also be used as a platform for selling products that aren’t available at physical stores such as books or car parts.
Key trends in the South African online landscape
While the South African online landscape has been growing steadily for years, there have been a number of key trends that have emerged this year. They include:
Mobile shopping. Mobile commerce is on the rise across Africa and in South Africa, with more people now shopping via their smartphones and tablets than on desktop computers (57% vs 45%). This trend could well be influenced by the fact that many consumers have access to 3G technology but not high-speed broadband internet at home. In fact, only 10% of South African users rely solely on mobile devices for their internet needs – suggesting that many are supplementing their mobile use with other means for accessing information.
Ecommerce growth in general. The value of ecommerce sales in South Africa grew from R18 billion in 2015 to R21 billion last year (a 12% increase), representing around 2% of total retail sales in 2016*. With its large population and high smartphone penetration rate, there’s plenty of room for growth here—and if other markets are any indication (such as Nigeria), it won’t be long before this sector takes off even more quickly than it has thus far!
Mobile shopping dominating
Mobile shopping is the fastest growing segment of ecommerce and is expected to grow from R2.2 Billion in 2016 to R6.7 Billion in 2020, according to [PwC](https://www.pwc.com/za/en/marketing-and-sales/mktg-2020/#download). Mobile shopping accounts for more than 50% of all ecommerce sales in South Africa, and we can expect this trend to continue as more people adopt smartphones and tablets as their primary devices for browsing online stores or purchasing products online.
Fast and easy transactions
Online shopping is convenient, fast and easy. It’s safe and private, too. And it’s accessible to anyone with a computer or smartphone. Online shopping saves time because you can do your research at home instead of travelling to different shops to try out different products. It also means that you don’t have to spend as much gas money on going from store-to-store. Online shopping is cost effective because there are no extra costs like parking fees or bus tickets when you shop online! You will also save money on petrol if you buy things online instead of driving around looking for deals in person – which might require multiple trips per week! If that wasn’t enough yet…online shopping is healthy! No more long lines at the checkout counter! Now we can go back upstairs after placing our order so we don’t have any reason left not visiting Zando today 🙂
Online retail sales in South Africa have experienced significant growth over the past few years. In 2017, revenue from online sales reached R7Billion and is had been expected to grow further to R10Billion in recent years.
Online retail sales in South Africa have experienced significant growth over the past few years. In 2017, revenue from online sales reached R7Billion and is had been expected to grow further to R10Billion in recent years. The South African ecommerce industry has shown great growth in recent years.
In conclusion, the South African ecommerce industry is a growing and changing space. With more and more people becoming comfortable with online shopping, this trend looks set to continue in the near future. With an estimated R10Billion in sales forecasted by 2020, there is still much room for this market segment to grow even further.