Standard Bank says online fashion sales have surged almost 80% over the past three years, with 2024 on track to outpace the activity of previous years.
As is the case in many parts of the world, SA consumers remain under pressure in the aftermath of the Covid-19 pandemic, thanks to a steep rise in inflation and the consequent sharp increase in interest rates. Still, the economy has experienced huge growth in e-commerce.
The banking group says South Africans continue to embrace online shopping, particularly in the fashion and apparel category, where local fashion e-tailers and international e-commerce giants are capturing an increasing amount of consumer spend.
According to data from Standard Bank’s credit division, there has been “a significant rise” in so-called card not present (CNP) transactions — remote purchases such as online shopping — at fashion e-tailers over the past few years.
The data shows a 79% growth in CNP transactions between 2021 and 2023. In the first quarter of 2024, Standard Bank has seen R125m worth of such transactions, higher than R84.4m by the same time in 2023, R75.8m in 2022 and R30m in 2021.
Total online fashion sales through the bank amounted to R453m in 2023.
Data from World Wide Worx shows e-commerce transactions in SA topped R55bn in 2022. The firm found e-commerce experienced explosive growth after the pandemic — especially for groceries and clothing — a big change since products such as consumer electronics dominated the online shopping.
Since the pandemic, 71% of South Africans have embraced online shopping and the e-commerce market is expected to reach R400bn in value by 2025.
Though growing, online retail is still seen as a small piece of the overall retail pie, which is estimated to be worth more than R1.3-trillion.
Standard Bank says SA consumers have been making the most transactions with their Standard Bank Mastercard credit cards at local fashion e-tailers, which accounted for the largest share of spend in 2023.
The bank also noted that purchases from Chinese e-commerce giant Shein are “growing aggressively”.
Shein is consistently among the top smartphone apps downloaded in SA, alongside social media apps such as TikTok. The company, which is preparing for a US listing, is valued at just under $50bn.
There are an estimated 250,000 Shein shoppers in SA, according to data from the Marketing All Product Survey (MAPS), figures, which have been referenced by Mr Price.
Even with all of this online activity, SA is still predominantly a physical shopping environment.
“Growth in SA’s digital economy is continuing at a remarkable pace, but not to the detriment of bricks and mortar as our data shows,” said Tumelo Ramugondo, head of Standard Bank’s credit card division. “Still, data from both local and international fashion retailers has been staggering.”
More shoppers are spending online as they become more comfortable with the environment and more options become available. US e-commerce giant Amazon is set to launch its platform in SA later in the year.
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