South Africans are doing more click-click buy

2014-11-30 15:01

After a slow start, South Africans are increasingly turning to the internet to do their shopping. Christina Kennedy reports

Despite connectivity headaches and concerns around internet security, online shopping is finally beginning to take off in South Africa – and ever more e-commerce is being conducted on smartphones.

As the festive season approaches, internet-based retailers are hoping for a sales boom from cash-flush but time-poor consumers who have their bonuses to blow. That is, of course, if the SA Post Office can deliver.

A survey of 10?000 local internet users by Effective Measure for the Interactive Advertising Bureau of SA earlier this year showed that 16.3% of people buy something online every month, 17.5% every three months and 23% every six months.

It also found that 23.2% of people use their cellphones for internet purchases and that mobile device users comprised a whopping 47% of the traffic on South African retail websites during the 2013 festive season.

Books, air tickets, hotel reservations, tickets for concerts and sporting events, and music and computer software are snapped up the most online, the research found.

And most of the country’s online shoppers (45%) are from Gauteng, while 23% are from the Western Cape.

Last month, the Interactive Advertising Bureau/Effective Measure reported that local digital usage is accelerating across desktop and mobile platforms – monthly unique browsers topped the 68?million mark in September, up from 46?million in July.

But the country’s online retail market is still only a fraction of what it could be. Estimates put it at between 1.3% and 2% of the total market for consumer goods, whereas in developed markets such as the US and the UK, online sales account for up to 14% of all consumer goods sold.

PricewaterhouseCoopers’ 2014 to 2018 South African Entertainment and Media Outlook projects that increased internet access will generate more consumer spend (37.6% of total revenue) than any other media in the next five years. Combined revenue from internet access and internet advertising in South Africa will hit R71.6?billion in 2018, the report predicts.

It’s not just the usual suspects – such as, which recently merged with – that are dreaming of a Christmas shopping bonanza. Smaller, niche e-tail sites are also taking advantage of shoppers’ desire for convenience and variety without having to set foot in a busy mall. is one of the top five online sites that shoppers who were surveyed by the Interactive Advertising Bureau/Effective Measure said they had bought from in the past (the others being,, Groupon and Woolworths).

It was also crowned best e-commerce services platform in this year’s South African eCommerce Awards.

Bidorbuy’s business model is based on independent (but vetted) sellers transacting directly with buyers, who can buy an item outright or bid in an online auction.

Marketing manager Joni Calitz says about 3?million to 5?million new products are listed on the site every month, and at any given point, there are about 1.5?million listings on the website.

“Given the present relatively low penetration of internet in South Africa, it is to be expected that the future holds more accelerated growth. A significant trend in recent years is the increase in visits to from mobile devices – from about 10% of visits a couple of years back to about 30% of visits these days.”

Jamie Munro, the marketing manager at, a niche e-tailer selling kitchen and dining products that was named the best local e-commerce store in the 2014 awards, has doubled its revenue almost every year.

Poetry is an extension of its shops, which include Cape Union Mart, K-Way and Old Khaki.

Evan Torrance, the marketing director of Poetry’s online store, says: “Our physical stores and online stores work very closely, and we are seeing more and more customers overlapping between both worlds – either investigating products on their phones in our stores or visiting stores then shopping online,” he says.

There has been a marked uptick in South Africans shopping for clothing, outdoor leisure and décor items on the internet, according to him.

Calitz agrees, saying “the willingness of shoppers to buy clothes, shoes and fashion accessories [online] has increased dramatically over the past few years”.

This despite the Interactive Advertising Bureau/Effective Measure’s finding that many South Africans are still deterred from buying certain items online because they “prefer to touch and feel the products” first.

High bandwidth costs, connectivity problems and postal strikes are major impediments to the growth of

e-commerce in South Africa. But, according to Calitz, “the biggest challenge to overcome is trust. Many people are still very sceptical about the trustworthiness of online businesses in general”. has introduced a buyer protection programme for that very reason.

Munro believes the increased online presence of traditional retailers such as Pick n Pay, Woolworths and Mr Price will help build trust in online retail. “The reality is it is safer [transacting on the internet] than using a credit card at a physical store – while shopping online, no humans see your details and can’t skim your card.”

But concerns around credit card security and phishing remain. The most recent MasterCard Online Shopping Behaviour Study found that 90% of South African respondents cited the availability of secure payment facilities as a critical factor when shopping online. And of those who had not shopped online in the preceding three months, 42% said it was because they were worried the transactions would not be safe. More than 80% said a human element helps allay these fears.

Munro blames South Africa’s unreliable postal service for “slowing e-commerce penetration far more than access to the internet, which is often cited as a factor”.

Most online retailers have had to use a more expensive third-party courier service as a result of this.

Two become one shifts focus

Despite being South Africa’s favourite online store – recording almost 1?million unique users last December, according to the Interactive Advertising Bureau – the e-store is planning to merge operations with after “many years of losses”.

The reason cited for the merger, announced in October, was that without scale, local e-commerce merchants are unable to compete with physical retailers as well as sites like’s Oliver Rippel was quoted as saying: “If you also take into account an uneven playing field against foreign operators who do not pay tax in South Africa, and the fact that high broadband costs are impeding the speed of growth in local online shoppers, combining forces gives us a better chance of success.”

The Treasury has made an attempt to level the virtual playing field with new value-added tax legislation aimed at foreign-owned electronic services firms, which took effect in June 2014.

Now, it is compulsory for international suppliers of e-commerce services – such as books and music – who sell to South Africans to register for VAT here. This in effect means they lose the 14% advantage they previously had.

The recent MasterCard Online Shopping Behaviour Study showed that only 24% of South African online consumer spend is on foreign sites – down 9% in two years – which means the proportion spent on local websites is increasing.

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