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

      Vodacom’s Maziv deal gets makeover ahead of crucial hearing

      18 July 2025

      Cut electricity prices for data centres: Andile Ngcaba

      18 July 2025

      Takealot taps Mr D to deliver toys, pet food and future growth

      18 July 2025

      ‘Oh, Ani!’: Elon’s edgy bot stirs ethical storm

      18 July 2025

      Trump U-turn on Nvidia spurs talk of grand bargain with China

      18 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Samsung’s bet on folding phones faces major test

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      OpenAI to launch web browser in direct challenge to Google Chrome

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025
    • In-depth

      The 1940s visionary who imagined the Information Age

      14 July 2025

      MultiChoice is working on a wholesale overhaul of DStv

      10 July 2025

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025
    • TCS

      TCS+ | Samsung unveils significant new safety feature for Galaxy A-series phones

      16 July 2025

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025
    • Opinion

      A smarter approach to digital transformation in ICT distribution

      15 July 2025

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • 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
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • 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
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » In-depth » Why e-commerce in SA is falling behind

    Why e-commerce in SA is falling behind

    By Ray Mahlaka4 July 2016
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    online-shopping-ecommerce-640

    By global standards, most South African consumers are making their purchases at brick-and-mortar stores, even as the online shopping sphere is poised for stunning growth.

    But it hasn’t been smooth sailing for the country’s still fledgling e-commerce market, with a small pool of tech-savvy consumers clicking their way through purchases.

    The market is already making gains, with a World Wide Worx report revealing that for the first time since the dawn of e-commerce in South Africa, online shopping is expected to reach 1% of overall retail in 2016. Statistics South Africa figures show that retail trade sales climbed by 3,3% in 2015 compared with 2014 to R762bn.

    MD of World Wide Worx Arthur Goldstuck says that although the 1% represents a small portion of overall retail, it’s still impressive and indicative of the investments so far made by retailers.

    “The number also masks the extent to which some major retailers have exceeded the 1% online mark by a substantial margin, compared to the vast majority that are not yet close to the market,” says Goldstuck.

    But the market is still underdeveloped. Goldstuck says in Western countries like the US, online retail makes up 10% of total sales while in South Africa is only heading to 1%. “The US is the leading market, but on the other hand, it shows how South Africa is growing,” he says.

    He singles out retailers such as Pick n Pay, Woolworths, and an early investor into online channels, Edcon Holdings, the operator of retailers such as Edgars, Jet, Jet Mart and CNA, as among the apparel and grocery retailers to have taken e-commerce seriously. Others like Mr Price, Truworths International and The Foschini Group are bolstering their online shopping channels.

    More have traversed this space and cashed in on a market with few competitors like online retailer of kitchen and homeware products Yuppiechef and same-day gift and flower delivery service company NetFlorist.

    Barriers to growth

    Limiting the growth of online shopping is the strong mall culture, and because of this some retailers can still afford to ignore e-commerce channels, Goldstuck adds.

    Already the retail market is widely viewed as over-shopped if recent figures by property research company Urban Studies are anything to go by. According to Urban Studies, South Africa has more than 2 000 shopping centres covering 23m square metres — comparable to 163 Sandton City malls.

    World Wide Worx MD Arthur Goldstuck
    World Wide Worx MD Arthur Goldstuck

    Two other major problems still inhibiting the penetration of online shopping is limited access to the Internet and the cost of broadband, says Vuyo Mpako, the head of digital channels and e-commerce at Standard Bank. Although uncapped access to fibre networks is increasing in homes across the country, Mpako says the high cost of internet access restricts the wider reach of online shopping across most consumer income groups.

    Mpako says other factors inhibiting e-commerce sales include a lack of trust in making online transactions and perceptions that only credit cards can warrant online purchases. “The journey for online purchases is not linear. We are seeing many customers look and browse online but don’t make the actual purchases online, but rather opt to go offline to make the purchases,” he says.

    Mobile still king

    Efi Dahan, the regional director for Africa and Israel at digital payments company PayPal, says the rapid penetration of smartphones and even more affordable ones in South Africa, will continue to be the driving force for online shopping in the coming years. “I believe that the smartphone shopping experience will continue to evolve as consumers feel greater comfort and security,” Dahan says in a statement.

    PayPal, which released the results of its global survey conducted by Ipsos on consumer shopping habits, revealed that South African shoppers spent an estimated R28,8bn online in 2015, and this is expected to rise to nearly R46bn in 2017. Those active in the online realm are buying non-food items such as apparel, books, tickets for events, music, videos and gifts.

    The survey also noted that about 59% of online shoppers make domestic purchases, with some 37% saying that they shop online both domestically and cross-border, and a further 5% only shop cross-border.

    “Though international shopping is still less popular locally, with the growing variety of products, larger range of prices, improved shipping options and increasing confidence in e-commerce, we believe that South African consumers will continue to purchase online, regardless of physical borders,” says Dahan.

    • This article was originally published on Moneyweb and is used here with permission


    Arthur Goldstuck Efi Dahan PayPal Standard Bank Vuyo Mpako World Wide Worx
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleMotsoeneng sidelined EFF: Matthews
    Next Article Ex-SABC bosses hit out at ‘betrayal’

    Related Posts

    SA businesses embrace gen AI – but strategy and skills are lagging

    17 July 2025

    Absa CEO Fihla to ditch ‘prison’ branches and revamp customer focus

    1 July 2025

    South Africans hit by wave of sophisticated banking scams

    28 May 2025
    Company News

    Vertiv to acquire custom rack solutions manufacturer

    18 July 2025

    SA businesses embrace gen AI – but strategy and skills are lagging

    17 July 2025

    Ransomware in South Africa: the human factor behind the growing crisis

    16 July 2025
    Opinion

    A smarter approach to digital transformation in ICT distribution

    15 July 2025

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 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.