TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Management shake-up at TymeBank – including a new CEO

      24 May 2022

      Standard Bank CEO apologises for weekend downtime

      24 May 2022

      South Africa fifth in Africa for blockchain funding

      24 May 2022

      Hein Engelbrecht to lead Mustek on interim basis

      24 May 2022

      Datatec in talks over Analysys Mason unit

      24 May 2022
    • World

      Terra collapse triggers $83-billion DeFi slump

      24 May 2022

      Zuckerberg sued in personal capacity over Cambridge Analytica

      24 May 2022

      Is the end of the bitcoin winter nigh?

      24 May 2022

      Zoom leaps higher on upbeat forecast

      24 May 2022

      Michael Dell becomes kingmaker in Broadcom, VMware deal

      23 May 2022
    • In-depth

      Bernie Fanaroff – the scientist who put African astronomy on the map

      23 May 2022

      Chip giant ASML places big bets on a tiny future

      20 May 2022

      Elon Musk is becoming like Henry Ford – and that’s not a good thing

      17 May 2022

      Stablecoins wend wobbly way into the unknown

      17 May 2022

      The standard model of particle physics may be broken

      11 May 2022
    • Podcasts

      The rewarding and lucrative careers to be had in infosec

      23 May 2022

      Dean Broadley on why product design at Yoco is an evolving art

      18 May 2022

      Everything PC S01E02 – ‘AMD: Ryzen from the dead – part 2’

      17 May 2022

      Everything PC S01E01 – ‘AMD: Ryzen from the dead – part 1’

      10 May 2022

      Llew Claasen on how exchange controls are harming SA tech start-ups

      2 May 2022
    • Opinion

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022

      Cash is still king … but not for much longer

      31 March 2022

      Icasa on the role of TV white spaces and dynamic spectrum access

      31 March 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Sections»E-commerce»E-commerce growth in South Africa outstripping forecasts

    E-commerce growth in South Africa outstripping forecasts

    E-commerce By Staff Reporter31 October 2018
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Online retail in South Africa will represent 1.4% of total retail sales in 2018, surpassing the R14-billion mark for the first time, according to new research.

    E-commerce in South Africa is starting to go mainstream, according to the findings of World Wide Worx’s Online Retail in South Africa 2019 study, released on Wednesday.

    The research, produced with the support of Visa and Platinum Seed, said e-commerce in South Africa will grow by 25% over 2017’s sales, which World Wide Worx said is a “surprise given predictions that online retail growth would slow down to below 20% by 2018”.

    Forecasts have been beaten as a result of massive investments in online retail, aggressive marketing and the rapid uptake of new shopping channels

    “Forecasts have been beaten as a result of massive investments in online retail, aggressive marketing and the rapid uptake of new shopping channels like mobile shopping and Instagram,” the company said.

    “Furthermore, most established online retailers have enhanced their digital presence and refined their fulfilment models, while many traditional retailers are starting to see significant growth in their online offerings.

    “It is not unusual to see growth rates of between 25% and 50% reported by individual online retailers, with slightly more tempered expectations for 2019 and 2020.”

    The result is that growth accelerated in both 2017 and 2018, and only a small dip in the rate of growth can be expected in 2019 and 2020, World Wide Worx said.

    Online retail is projected to reach 1.4% of total retail sales in South Africa, based on an estimated R1-trillion to be spent via traditional channels in 2018. The 2% mark is likely to be reached by 2022.

    Forecasts

    The forecasts by World Wide Worx for the next three years, from 2018 to 2020, show online retail sales more than doubling from 2016, to almost R20-billion, a year sooner than originally forecast in 2016.

    “Online retailers in South Africa still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature,” the researcher said.

    Seventy-five companies with an online retail store or market participated in an industry survey as part of the project, providing a representative sample of the local overall online retailer population. In total, the survey of South African retailers yielded over 6 000 data points for analysis.

    Apparel remains the fastest growing sector in online retail in South Africa 2019, but is also the sector with the highest turnover of businesses. “Apparel illustrates the perils of a low barrier to entry: the survival rate of online stores in this sector is probably directly proportionate to the ease of setting up an online apparel store.”

    The highest number of respondents was in the apparel category — 23% of the sample.

    A significant impediment to the growth of e-commerce in South Africa is the unwillingness of business to reinvest, the research found. Only one in five companies surveyed invested more than 20% of their online turnover back into their online store. Over half invested less than 10% back.

    “This despite a high 71% of all online retailers surveyed who say they are profitable. However, profits in e-commerce are no definite indicator of long-term sustainability. Young online retailers who do not reinvest in the underpinnings of their business may be sacrificing short-term financial gain for long-term survival.”

    The single most critical factor in the success of online retail activities, as reflected in this survey, is customer service. No less than 75% of respondents regarded it as highly significant, with another 23% seeing it as somewhat important, giving it a 98% importance rating.  — © 2018 NewsCentral Media

    top World Wide Worx
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleNaspers shares jump most since 2014
    Next Article Nasdaq wants to help stamp out cryptocurrency fraud

    Related Posts

    Management shake-up at TymeBank – including a new CEO

    24 May 2022

    Standard Bank CEO apologises for weekend downtime

    24 May 2022

    South Africa fifth in Africa for blockchain funding

    24 May 2022
    Add A Comment

    Comments are closed.

    Promoted

    Generalists tend to outperform specialists when the going gets tough

    24 May 2022

    Vodacom champions innovation acceleration in Africa

    23 May 2022

    Kyocera answers top 10 questions on enterprise content management

    23 May 2022
    Opinion

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    From spectrum to roads, why fixing SA’s problems is an uphill battle

    19 April 2022

    How AI is being deployed in the fight against cybercriminals

    8 April 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.