For first time ever, online shopping will cross 1% of retail sector

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Online shopping isn’t as widespread in South Africa as it is in parts of the developed world, but as internet usage increases, the number of online shoppers is rising.

It still isn’t really a significant portion of the population, but according to estimates from World Wide Worx, online retail in South Africa will reach 1% of overall retail during 2016 – for the first time ever.

This finding is part of the company’s Retail in South Africa 2016 report, which explained that it has more to do about the psychology of shopping than actual monetary value.

“While 1% represents a very small proportion of overall retail, it is also a psychological barrier for investment in ecommerce initiatives by physical retailers,” says Arthur Goldstuck, managing director of World Wide Worx and principal analyst for the online retail survey.

One of the issues that has stifled the growth of online shopping in South Africa, is the fact that it is considered to be undeveloped when compared to Western countries.

“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.”

But online shopping has been growing in the country, as in 2015 the rate of growth was 26%, making online shopping a R7.5-billion industry. This year’s growth is projected to be slightly lower at 20%, but is expected to cross the R9 billion mark.

Goldstuck also said that, looking at models for the future, online retail sales will double doubling between now and 2020.

“While this may seem significant, enthusiasm should be tempered by the awareness that the range of business models employed by South African online retailers is still somewhat conventional. This suggests that South African ecommerce has not attained the sophistication of major Western markets, where every category of product is characterised by a wide range of business models,” he explained.

[Image – CC by 2.0/switchhook]

Charlie Fripp

Charlie Fripp

Charlie started his professional life as a motoring journalist for a community newspaper in Mpumalanga, Charlie explored different journalistic angles since his entry into the fast-paced world of publishing in 2006. While fostering a passion for the arts, Charlie developed a love for technology – both which allowed him to serve as Entertainment and Technology Editor for an online publication. Charlie has since been heavily involved in consumer technology for various websites and publications. He thoroughly enjoys World War II films and cerebral documentaries; aviation; photography and indie music. Oh yes, and he also has a rather strange obsession with collecting coffee mugs from his travels.