Online shopping is gaining traction across Africa and other emerging markets as Internet penetration continues to rise.
African online consumer trends largely echo those of India, where, as mobile ownership and Internet penetration continue to rise, online groceries become more desirable. A 2014 US Department of Agriculture report reflecting on the increase in online grocery shopping in India notes that “the growth in India’s online retailing for food and groceries is a function of the rise in total Internet users from 120-million to 213-million in the past year, as well as a fall in mobile handset prices and a rise in smartphone penetration”.
Talking to daily newspaper ‘The Economic Times’, Amit Bhartiya, advisor at Mumbai-based e-commerce grocery website LocalBanya, cautioned, however, that “offline players going online cannot make a mark if they do not offer competitive pricing and value”.
Indeed, competition is the name of the game, with smaller players in the online grocery market competing against the big guns such as online stalwart Amazon India, which recently introduced general online store KiranaNow, an express delivery platform in partnership with neighbourhood stores. ‘Knowledge@Wharton’, the online journal of the Wharton business school of the University of Pennsylvania in the US, recently noted this development in an article entitled Online Groceries in India: Will Consumers Bite? (7 May 2015).
Launch in March this year, the KiranaNow pilot project’s stated aim is to deliver goods purchased online within two to four hours. An Amazon India spokesman told the ‘India Today’ news website at the time: “Our vision is to enable our customers to buy anything and everything they want online, anytime and anywhere – at low prices and a convenient, fast and reliable delivery experience.”
While India is forging ahead with online buying, according to the recently released Nielsen ‘Future of Grocery Report’, a blended approach to online retail is advisable for the African market. Nielsen Africa Retailer Services and E-Commerce MD, Harsh Sarda, noted: “The most successful modern and traditional trade retailers and manufacturers will be those at the intersection of the physical and virtual worlds, leveraging technology to satisfy shoppers how, when and where they want to shop.”
He continued: “A key aspect of meeting these needs is in-store digital enablement options that bring the ease, convenience and personalisation of online to brick-and-mortar stores. Instituting digital strategies into the in-store experience is, therefore, not just a nice-to-have for key consumer markets – these options can increase dwell time, engagement levels, basket size and shopper satisfaction.”
This could be in the form of a retailer or loyalty app, or Wi-Fi that enables shoppers to opt in to receive information on special offers while they’re shopping. While this is currently a more prevalent strategy in South Africa, increasing mobile penetration across Africa could potential broaden the appeal of a blended physical and digital shopping experience where convenience and value take centre stage.
According to a 2014 MasterCard ‘Online Shopping Behaviour Study’, published in conjunction with research organisation World Wide Worx, online grocery shopping in South Africa displays a steady increase with local e-commerce sites becoming the preferred option. Only 24% of local online spend was on foreign shopping sites, down from 27% the previous year and 33% in 2012.
“The products that consumers are buying suggest that online shopping is becoming increasingly mainstream, which also bodes well for local retailers,” Arthur Goldstuck, MD of World Wide Worx, told business website ‘BusinessTech’. “No longer is online shopping confined to books and DVDs, plane tickets and apps.”