ecommerce in South Africa 2020

ecommerce in south africa

If you’ve landed on this blog post then you’re likely one of two people. You’re already part of the ecommerce story that’s rapidly unfolding in South Africa or you want to be part of it. Either way we hope you’ll find the insights we’ve found from trusted researchers helpful.

COVID-19 in 2020 has brought about unprecedented times and are producing unexpected & extraordinary behaviours – online shopping is at the top of the list.  World Wide Worx, Platinum Seed and Visa revealed their last piece of research detailing the ecommerce landscape in South Africa in 2019. It’s going to be interesting to see how close their predictions were considering the unknown pandemic that would unfold a year later.

In this blog we’ll highlight the key findings of that report so we have something to refer back to in the future. Local online retail was already on a fairly steep curve and we know that it’s just got steeper.

Key insights of ecommerce in South Africa

1.

1.4% of retail revenue was generated online by local retailers. They refer to this as the psychological 1% – a barrier that needs to be broken and which has so a lot to do with trust. Has lockdown helped to break through that barrier – we would say it’s resounding yes. It’s proven in emerging markets that if you break that barrier and move beyond the 1% to 2 and 3% its starts a snowball effect. We say bring it on!

2.

Culturally, mall-going is seen as an experience. It’s a destination to go for lunch, the cinema or entertainment; it’s not just about shopping. Shopping is part of our entertainment culture and malls create a place for us to do that. With social distancing likely to be with us for a long time, this culture might well change and retailers that aren’t online better be prepared to change with it.

3.

The continuation of the steep growth of users can be attributed to Takealot’s massive investment into online retail as well as the rapid uptake of new shopping channels like mobile shopping & Instagram.

4.

Traditional retail is growing at only half the rate of online retail. 7.2% compared to 20% respectively. Keep watching this space, it’s going to be interesting to see how the gap continues to widen.

5.

Overall online retail penetration peaked for uses aged 25-34, making up 23.7% of the market but dropped off to 15% for 45-64 years. As trust continues to build for the older age groups, these percentages should start to equal out.

6.

On average a consumer is ready to buy online after 5 years of using the internet. It’s called the Experience Curve and it’s all about trust. If we want to shorten the curve we need to put pressure on the industry. It’s not about faster bandwidth, but all about customer experience. As an online seller it’s undoubtably the most important aspect of success.

7.

Bring the human factor into the online experience and you’ll build trust. Just ask Yuppiechef about their handwritten, personalised cards and how it set them apart.

8.

Building relationships between brands and consumers both online and offline also bridges the trust gap.

Achieving success in online retail is not a one size fits all strategy. Although there are definitely many basic commonalities. Once the market of people who are ready to purchase online have been identified, they must be segmented and targeted according to the product category, their interests and specific attention must be paid to the product. And then what remains is a well thought out ecommerce marketing strategy so consumers are made aware that your online store exists and you can start building that all important trust relationship!

Source: The South African ecommerce landscape 2019

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