While online retailing is on the rise in South Africa, it still only accounts for 1% of total retail spending
While online retailing in South Africa is growing and attracting increasing attention from marketers and consumers, it still accounts for only a tiny percentage of overall retail spending in the country. This is one of the most notable findings of a study released yesterday (Wednesday).
According to the Online Retail in South Africa 2016 report by Johannesburg-based technology consultancy World Wide Worx, e-commerce spending will total around R9-billion. However, this is still only 1% of total retail spending.
“While 1% represents a very small proportion of overall retail, it is also a psychological barrier for investment in e-commerce initiatives by physical retailers,” said Arthur Goldstuck, MD of World Wide Worx and principal analyst of the survey.
“The number also masks the extent to which a number of major retailers have exceeded the 1% online mark by a substantial margin, compared to the vast majority that are not yet close to this mark – if they have an e-commerce presence at all.”
Goldstuck noted that online retail in the country is often viewed as being undeveloped and lagging behind the major international markets. “Even retailers themselves use this kind of terminology; however, this often also results in an underestimation of the healthy growth rate of online retail in this country.”
He said it should be borne in mind that much of this growth has come as a result of an increase in the number of experienced Internet users in South Africa who are ready to transact online, rather than the retailers themselves getting it right and convincing shoppers to spend more on e-commerce.
The study forecasts that by 2020 local online retail sales will double