New data from banks and payments platform providers shows that the online shopping revolution has been sped up quite significantly due to lockdowns, driven by education and grocery spending.
In 2019, online retail made up just 1.4%, or R14bn, of total retail sales for the year. So far in 2020 that number is said to have reached 5%, with expectations that it will get to 10% by the end of 2020.
Derek Cikes, chief commercial officer at online payments company Payflex, says payments done through its platform have skyrocketed since the lockdown. Payflex's platform is used by companies such as Superbalist, Incredible Connection, HiFi Corp, Essops Home and Dry Dock. It makes money by offering short-term credit for online transactions. It is not surprising that grocery shopping recorded the highest increase as more people avoided going to the shops.
FNB has also recorded an increase in online transactions compared with the first half of 2019.
Thokozani Dlamini, CEO of FNB Merchant Services, says the effect is not only on shopping behaviour but the manner in which consumers opt to pay for goods and services. For example, when considering franchise food delivery services, very few consumers physically pay via cash or card; most of the payments are carried out digitally, she says.
FNB used data from point-of-sale devices, scan to pay and online payments transactions to compile the data.
According to the bank’s findings, online sales of educational services jumped between January 2020 and June 2020, compared with the same period in 2019, boosted by the shift to e-learning, which has increased demand for online courses, specialised software programs and digital publications.
The other sector to benefit is electronics, electrical and computers, as more people are forced to work and study from home. With the pandemic expected to be around for some time, many industries are forced to join the digital wave to capture the growth and the demand for online services.
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