South Africa: E-commerce goes mainstream

In a recent study, market research company World Wide Worx revealed that online retail in South Africa is on the rise and is expected to represent 1.4 percent of total retail sales in 2018, reaching mainstream status.

According to the study, South Africa has beaten forecasts due to massive growth in online retail investments, aggressive marketing and the rapid uptake of new channels, such as social media, to make sales.

The study also revealed that growth in the sector in 2018 has been between 20 percent and 50 percent for individual retailers, which is largely unheard of, and forecasts predict an even higher increase between 2019 and 2020.

South Africa

South Africa has surpassed Nigeria as the leading e-commerce market in Africa. This is due to South Africa’s higher disposable incomes as compared to Nigeria.

According to an article by Fitchsolutions.com, South Africa has more disposable income per capita compared with Nigeria, and consumers are able to spend more on a per capita basis.

Fitch Solutions also predicts that e-commerce sales in South Africa will rise to over R46 billion this year and to R77 billion by 2022. This is an annual growth rate of 14.1 percent over a five-year period.

Botswana

Botswana comes in second in Africa as it shares similar characteristics to South Africa.

The Southern African country offers favourable operating conditions for e-commerce and the country has scored the highest in Fitch’s region for trade procedures and governance and short-term economic and political risks indexes. Household spend in Botswana saw a growth of 6.8 percent in a five-year period.

Kenya

Kenya is another major player in the e-commerce space in Africa. The country’s digital innovation M-Pesa has been the leader of the country’s e-commerce growth. M-Pesa is a mobile money transfer service set up by Kenyan telecoms provider Safaricom.

Safaricom also launched an e-commerce website this year called Masoko. The website offers electronics, food and personal care.