Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

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

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Cell C may list on the JSE as Blue Label eyes big restructuring

      16 May 2025

      Nvidia shares roar back to life

      16 May 2025

      5 000 fake DStv chargers seized, destroyed in Durban port bust

      16 May 2025

      Now Facebook wants to … scan your face

      16 May 2025

      Grok’s South Africa blunder raises alarms over chatbot oversight

      16 May 2025
    • World

      Microsoft to lay off 3% of workforce in organisation-wide cuts

      14 May 2025

      AI-voiced audiobooks are coming to Audible

      13 May 2025

      Apple turns to AI to tackle iPhone battery woes

      13 May 2025

      Vodafone CFO to step down

      7 May 2025

      Lights, camera, tariffs: Trump declares war on foreign flicks

      5 May 2025
    • In-depth

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025

      Social media’s Big Tobacco moment is coming

      13 April 2025

      This is Europe’s shot to emerge from Silicon Valley’s shadow

      10 April 2025

      Microsoft turns 50

      4 April 2025
    • TCS

      Meet the CIO | Schalk Visser on Cell C’s big tech pivot

      13 May 2025

      TCS | Kiaan Pillay on fintech start-up Stitch and its R1-billion funding round

      7 May 2025

      TCS+ | Switchcom and Huawei eKit: networking made easy for SMEs

      6 May 2025

      TCS | How Covid sparked a corporate tug-of-war over Adapt IT

      30 April 2025

      TCS+ | Inside MTN’s big brand overhaul

      11 April 2025
    • Opinion

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025

      ICT distributors must embrace innovation or risk irrelevance

      9 April 2025

      South Africa unprepared for deepfake chaos

      3 April 2025

      Google: South African media plan threatens investment

      3 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » News » South African e-commerce is a Covid-fired market of risk and reward

    South African e-commerce is a Covid-fired market of risk and reward

    By Agency Staff15 July 2020
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Like many of her compatriots, Kubashnee Moodley made her first foray into online shopping during South Africa’s coronavirus lockdown. She is not a satisfied customer.

    The 42-year-old business management coach was once charged for a parcel she never received and also had groceries delivered to her Johannesburg home after dark. “I was not going to risk going to the gate … especially with crime so high,” she said.

    Moodley’s experience encapsulates the challenging situation facing the e-commerce sector in South Africa.

    The post-Covid boom is straining the capacity of even the largest retailers, leaving some customers complaining of long wait times and poor service

    Having long lagged behind much of the world in terms of e-commerce, South African retailers and delivery start-ups have been doing a roaring trade online as consumers shy away from shops during the Covid-19 pandemic, with the likes of Pick n Pay, Checkers and OneDayOnly experiencing an explosion in demand.

    But this post-Covid boom is straining the capacity of even the largest retailers, leaving some customers complaining of long wait times and poor service.

    The ability to alleviate those growing pains will dictate which companies emerge as e-commerce leaders and which will be left behind.

    Factors such as fear of parcel theft, online fraud and high mobile data costs have long hindered South African e-commerce growth, experts say.

    Challenges

    Global e-commerce leviathan Amazon does not operate in the economy of 58 million consumers, partly because of the cost and challenges of setting up the required infrastructure, analysts say. And African giant Jumia only launched in South Africa this year.

    Amazon, the vast majority of whose customers have to rely on cross-border shopping at its 16 websites around the world, declined to comment.

    E-commerce accounted for only 1.6%, or US$1.2-billion, of South African retail sales in 2019, according to London-based market research firm Euromonitor International. In the US, the figure is 14.8%. Even Kenya shops more online than its larger neighbour.

    However, Euromonitor expects sales to double this year while Nielsen South Africa’s retail lead analyst Gareth Paterson predicts up to 200% growth in online food purchases.

    A survey conducted by Visa found that 64% of consumers in South Africa bought groceries online for the first time because of the coronavirus outbreak and that 53% made their first online purchase from a pharmacy.

    When lockdown restrictions imposed in late March were loosened in May, market researcher Urban Studies found that only 50% to 70% of customers returned to shopping centres.

    This was the quantum shift. We probably advanced two to three years in terms of online demand because of Covid-19

    “This was the quantum shift,” said Anthony Thunstrom, CEO of clothing and homeware retailer TFG. “We probably advanced two to three years in terms of online demand because of Covid-19.”

    Nikki Lincoln, a 34-year-old communications specialist, thought shopping online would spare her the “unnecessary risk” of going out during the pandemic.

    “Woolworths has closed off online deliveries for my area, so I can’t shop there at all. And Pick n Pay has such a long waiting time you might as well just go to the shop,” she said, naming two of South Africa’s leading supermarket chains.

    Woolworths said that home delivery suspensions were temporary, resulting from an employee testing positive for the virus, but acknowledged that increased demand had caused delays.

    Click and collect

    In April it launched a drive-through click-and-collect service, boosting its online capacity by 50%.

    When the lockdown began, Pick n Pay partnered with Bottles, an alcohol delivery app that expanded into groceries with the promise of same-day service.

    “Our enhancements last year to create a stronger online operation … enabled us to expand our offer in response to the demand for online shopping. Our team rapidly increased its capacity and reach and met the needs of many new customers,” Jessica Knight, head of online at Pick n Pay, said without commenting specifically on delays.

    Sixty60 — a grocery delivery app run by Shoprite’s Checkers supermarkets — backed away from hourly dispatching, opting instead for same-day delivery. It is now expanding its delivery area weekly.

    Companies hoping to compete, therefore, are quickly pumping money into their e-commerce offerings even as they feel the pain of a pandemic-induced economic downturn.

    Grocery delivery business Zulzi was forced to limit trading to two hours a day for two weeks after shoppers overwhelmed its app, but it has since quadrupled the number of shoppers and drivers it employs and doubled its customer care staff.

    It is now processing 2 000 orders a day — five times 2019 levels — and has done a year’s worth of turnover in the past two months.

    TFG, the brands of which include @home, Foschini and Markham, plans to raise R3.95-billion this month, partly to bolster its e-commerce business.  — Reported by Nqobile Dludla, with additional reporting by Promit Mukherjee, Olivia Kumwenda-Mtambo, Libby George and Omar Mohammed, (c) 2020 Reuters



    Amazon Anthony Thunstrom Checkers OneDayOnly Pick n Pay Sixty60 TFG top Zulzi
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleChina warns UK: Dumping Huawei will cost you
    Next Article Microsoft launches first Surface devices in South Africa

    Related Posts

    Shoprite’s Sixty60 app now ‘talks’ to blind users

    13 May 2025

    AI-voiced audiobooks are coming to Audible

    13 May 2025

    Bezos vs Musk: Project Kuiper begins deployment to rival Starlink

    29 April 2025
    Company News

    Zoom Fibre’s mission: powering the economy with world-class internet

    16 May 2025

    Retailers: take back control of your tech stack with self-enablement

    15 May 2025

    Sigfox South Africa unveils next-gen asset intelligence for smarter logistics

    15 May 2025
    Opinion

    Solar panic? The truth about SSEG, fines and municipal rules

    14 April 2025

    Data protection must be crypto industry’s top priority

    9 April 2025

    ICT distributors must embrace innovation or risk irrelevance

    9 April 2025

    Subscribe to Updates

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

    © 2009 - 2025 NewsCentral Media

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