New data from Prosus-backed fintech operator PayU suggests that African countries, led by SA, Nigeria and Kenya, have reached a tipping point when it comes to e-commerce adoption.
It’s no secret that South Africans have taken to the digital economy in their numbers over the last year. While online retail remains relatively small at about 5% of the total retail pie, the e-commerce opportunity is much greater.
According to a new report by PayU, SA has the highest internet penetration on the continent at 56%, with 22-million people or 37% of the population participating in e-commerce.
The report examines four of the fastest-growing consumer sectors where PayU sees the biggest growth potential over the coming years: beauty and cosmetics; fashion and gallantry; digital goods which consist of music streaming, video on demand, video and audio conferencing and e-publishing; and education.
Karen Nadasen, CEO of PayU SA, says: “Retailers adapted quickly over the last year, and despite early bans on non-essential purchases, we saw significant growth in e-commerce, with more and more transactions being completed on mobile devices — up 35% on 2019 levels in SA as an example.”
While the message and promise of e-commerce has been spread far and wide, small businesses and large corporates alike might want to pay attention to these trends. If anything, the numbers further motivate the case.
For SA, predicted e-commerce consumer spend on fashion and gallantry — apparel, bags, footwear and accessories — is set to be about R21.2bn in 2021. During the same period, spending on digital goods together with beauty and cosmetics is expected to reach a combined $505m.
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