E-commerce in South Africa is in its infancy by global standards, but it is growing significantly. The number of internet users is increasing due to improvements to internet infrastructure, the falling cost of internet subscriptions, the growing demand for mobile devices and the maturation of digital natives – millennials and Generation Z. According to Euromonitor International, there were 4.9 million internet subscribers in 2015,
and Target Group Index reports the total number of online shoppers in 2015 was 3,225-million.
These consumers have a comfort with technology and online shopping is an ingrained behaviour.
To capture these consumers, retailers are launching different digital strategies to make their shopping experience faster, easier and more efficient. In a 2016 South African Online Retail report, released by World Wide Worx, online retail continues to grow at a rate above 20 percent since the turn of the century. In 2015, the rate of growth was 26 percent.
Online or mobile coupons are popular with 13 percent of local respondents saying they already use them, and 52 percent say they would definitely be willing to use them in the future, according to the Nielsen Future of Grocery report. The use of the smartphone to inform the shopping trip is also gaining momentum and may be a contributing factor to 60 percent of respondents saying they are already using or are definitely willing to use retailer apps or loyalty apps on their mobile phone to receive information or offers while in store. A smaller number of consumers are using “click and collect” services in which consumers order groceries online for pickup at a store or other location.
Harsh Sarda, e-commerce and retailer services managing director at Nielsen Africa, reports that product assortment is a key driver for e-com purchases. Generally, the international stock-up brands, such as personal care and household items, are prime selections. Immediate-use items, such as fresh and frozen foods, condiments and beverages, are slower in adoption.There is opportunity among niche consumer segments – especially in the healthy eating space, and in other categories that may be more difficult to find on in-store shelves.
Consumers are adopting and using electronic devices for payments, according to Euromonitor International. Many retailers are investing in mobile-friendly websites to capitalise on this trend. The availability of simpler payment methods is also boosting online spending by allowing consumers to conduct transactions online. These trends, coupled with the launch of online mobile proximity payment systems such as SnapScan, FlickPay, Zapper and GustPay are driving growth within the electronic payment environment. However, despite increasing penetration of mobile devices, remote payments using PCs continue to dominate digital payments.