Online shopping in SA is a nascent industry‚ but one with plenty of room for growth. This is the indication of a recent global survey from market research company, Nielsen. The survey was conducted in 63 countries and included a sub-set of results from SA.
The findings paint a picture of consumers who do not buy online often but are open to it, and which point to rising connectivity as a reason for attractive growth prospects for online retail in the country. Only 3% of respondents say they buy online "regularly".
The most common online purchases include travel arrangements‚ event tickets‚ books and fashion. One category South African businesses hope to exploit is online grocery shopping.
Online grocery shopping has long been thought of as the holy grail of e-commerce, but online giants, such as Amazon, have tried and mostly failed in their efforts to capture the lucrative food industry so far. However‚ 40% of South Africans surveyed said they are not currently buying groceries online — but would consider it.
According to Julie-Anne Walsh‚ head of marketing at online seller Takealot‚ the penetration of e-commerce in SA is only about 1% of the total retail market. In the US and China it is 13% and 15%‚ respectively. She said that although no one knows what the potential ceiling is for SA’s e-commerce activity‚ but the gap between SA’s market and that in other countries presents an opportunity for many businesses.
"In SA’s favour are our youthful demographics and significant country-wide mobile usage‚ making mobile and app shopping a crucial focus for growth in South African retail‚" Walsh said.
Liz Hillock‚ head of online at Woolworths‚ agrees that the increasing prevalence of mobile users is an area where businesses can capitalise, saying that more than half the traffic to Woolworths website is from customers browsing on their mobile phones.
The company has made a concerted push towards online in recent years‚ including a dedicated warehouse to improve availability of Woolworths fashion products online‚ and Hillock describes sales for both online food and fashion divisions as "strong".
Walsh points to the success of Black Friday shopping in SA as an indication that there is still much room to grow. Takealot was one of the first companies in SA to promote the shopping holiday‚ which is popular in the US. Takealot’s first Black Friday was in 2011 and the company has increased its sales more than 50-fold since then. Sales last year were R56m‚ a more-than 50% improvement on the previous year, and Walsh said she expects the company to grow its sales by 50% again this year.
TMG Digital
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