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The South African eCommerce Landscape

Creating a digital marketing strategy framework
South African eCommerce Market

The South African eCommerce Landscape

It’s no surprise that the eCommerce market is experiencing growth in South Africa. Combine the convenience factor with an increase in consumer trust, this sector will continue to grow in years to come.

Traditional brick and mortar retailers have had no choice but to move with the times and create online stores to compete with mail-order companies. Online spend growth is predicted to be 15% until 2021. This accounts for 1% of the country’s retail sector as a whole and indicates immense potential for growth and opportunity.

Internet user penetration is at 47% and expected to reach 60% by 2021 and mobile penetration is 65% and growing.

In South Africa, generally B2B customers are also B2C customers, so interaction is generally the same. Both have become accustomed to performing consumer product research online.  As a result both types of customers are using consumer and B2B websites to purchase products and services for their companies or as individuals.

WHAT PRODUCTS ARE THE MOST SOLD?

The top e-Commerce product category in South Africa is media products, including books, CDs, DVDs, and games.  Consumers are also price conscious, favoring online promotions and coupons.  South Africans are spending more time online researching better prices and seeking product recommendations on social media.

WHERE DO SOUTH AFRICAN’S BUY FROM WHEN SHOPPING ONLINE?

South Africans purchase mostly from South African websites, but 27% purchase from the United States, and 14% from Europe. The U.S. version of Amazon.com is the third most visited e-commerce website in South Africa

HOW DO SOUTH AFRICAN’S PAY FOR THEIR ONLINE SHOPPING?

Credit card and debit cards are the most preferred payment methods. Consumers also use e-wallet services for online payment. Due to the growth of credit card fraud, the Payment Association of South Africa mandated the use of 3D Secure in 2014. Merchants have reported that increased flexibility in the application of 3D Secure to online transactions in recent years has reduced cart abandonment by consumers.

ECOMMERCE AND THE MOBILE REVOLUTION

Cell phones have largely replaced wallets, as banks, card operators, retailers and communications companies provide alternatives to cash as a means of payment.  M-commerce, where cell phones are used to pay for goods and services, has advanced beyond mobile banking to debit and credit transactions.  M-commerce is particularly attractive in South Africa due to the rapid increase in the number of cell phones, limited access to the Internet, and poor fixed-line infrastructure. This provides an immense opportunity for online retailers, as mobile spend is projected to increase by 123% by 2018.

WHAT ROLE DOES DIGITAL MARKETING PLAY?

Social media platforms are becoming more pervasive as marketing tools in South Africa. More than 90% of South African major brands advertise on social media platforms.   On a consumer level, growth for most networks has slowed down, but engagement by users has intensified.

Data and content courtesy of https://www.export.gov/article?id=South-Africa-ecommerce.