SA’s top online stores have all enjoyed marked growth over the same period last year, with some reporting up to 40% year-on-year sales increases. However, an analyst says the performance could have been stronger.
One of SA’s largest e-retailers, Kalahari.net, says the boom started on Cyber Monday — the first day after Thanksgiving in the US — and the company’s initial reports show it was a good season.
“We have had another bumper Christmas season, with higher than forecast sales, and positive signs of industry growth and consumption,” says Kalahari.net GM Gary Noviykas. He says the company roped in a record number of first-time buyers.
“This is a strong indicator of increased e-commerce activity, with an interesting trend in consumption in addition to the traditional books, CDs, DVDs, and games, of high-end electronics like the iPad and e-readers,” he says.
Gift and flower delivery business NetFlorist also had a robust season, boosting its sales by 30% year-on-year. The company recently launched NetGifts, which helped it rake in around 15 000 transactions over the Christmas period.
“We were not expecting extraordinary growth as it is effectively the launch of a new brand and it takes time for a brand to gain traction in the market,” says Sue Morris, marketing executive for NetFlorist and NetGifts. Despite a strong year, she says although online shopping will grow, it will probably happen at a slower rate.
“The ability to use debit cards as well as credit cards to transact on many sites will have a positive impact this year.
The growth of mobile is a key trend that all e-retailers will need to be on top of,” she says.
Mobile retail has yet to take off. However, late last year travel company Travelstart launched a mobile airline booking platform. The travel industry has traditionally led the online purchasing space.
Take2, which competes directly with Kalahari.net, also enjoyed strong year-on-year growth, boosting its sales by 40% over the previous year.
The company says its Christmas sales made up about 20% of its total annual sales, in line with expectations.
Despite this, World Wide Worx MD Arthur Goldstuck says sales figures from e-retailers are not as encouraging as many of them had hoped for. “SA stores were hoping to mimic the massive growth in sales that was experienced in the US, but they really didn’t show as much growth,” he says.
According to Goldstuck, the total market for online stores locally is in the region of R2bn/year. However, he says that on average the Christmas season only brought in about R400m. “People don’t trust online stores to deliver in time for Christmas,” Goldstuck says.
It appears DVDs are still hot on consumer Christmas lists, with all stores reporting strong sales in this category. Hershell Gibbs’s book, To the Point, was one of Kalahari.net’s strong sellers. — Candice Jones, TechCentral