Market Trends of South Africa E-Commerce Industry
This section covers the major market trends shaping the South Africa E-Commerce Market according to our research experts:
Fashion industry to have significant growth in the country
- Digitization has progressed in South Africa in the last few years. All major domestic and international clothing retailers have an online presence and are investing heavily in e-commerce platforms to improve the user experience. Even online-only retailers like Superbalists and Zando already have a competitive advantage over apparel specialists in the e-commerce business with their mobile apps. Mobile phone penetration is increasing the market for online shopping in South Africa.
- South African retailers can also learn a lot from the experience of companies that have successfully adapted to hybrid models. Retail chains that have invested in online experiences as part of a broader transformation to deliver a better customer experience are on track. Walmart has made significant investments to improve the online customer experience. Their website has the same simple and intuitive interface and many product information found on major e-commerce sites. Customers can order online, deliver the item, or buy online and receive it over the counter.
- Further, digitization affects many aspects of the business, not only in shopping but also in payments and deliveries. Companies in the country are focused on innovating payment solutions, such as PayJust Now, a digital version of the traditional lay-by method that locals are accustomed to. PayJust Now allows users to collect items after the first payment, unlike traditional stores where customers have to pay the full amount before they receive the order. Platforms like this will leverage online shopping for the fashion industry in the country.
- There is no shortage of demand for fashion across the country. However, the country is witnessing a rise in supply with growing internet penetration and a mobile-first population. The stage is set for a fashion e-commerce boom. Further, it needs to build robust and effective platforms that connect consumers to entrepreneurs to maximize the opportunity.
- Moreover, according to the African Development Bank Group, sub-Saharan Africa accounts for almost 1 percent of the world's fashion exports. The global customer base provides African designers, especially high-end African designers, with the opportunity to attract more customers with price-worthy purchasing power. The use of digital tools can help African fashion brands pursue global success.
Understand The Key Trends Shaping This Market
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Internet and Smartphone penetration are driving the e-commerce market in the country
- E-commerce is attractive in South Africa due to the surge in smartphone usage and poor landline infrastructure. This presents immense opportunities for online retailers as mobile spending is expected to increase. Enterprises need to incorporate mobile optimization into their e-commerce products to improve their buying experience.
- Mobile phones have replaced wallets as banks, card operators, retailers, and carriers offer cash alternatives as payment methods. E-commerce uses mobile phones to pay for goods and services but has evolved beyond mobile banking into debit and credit transactions in the country.
- In South Africa, retailers should pursue both in-store and online retail strategies. Being behind the rest of the world in eCommerce allows South African retailers to learn from global organizations and leapfrog to best in class. Integration between online and offline will make it easier to support the data exchanges and system interconnections needed for the omnichannel experience, which covers shopping in stores, online via mobile devices, or through social media interactions.
- The Communications Department (DoC) and Digital Technology (DCDT), by-mid 2021, have completed the Digital Economy Master Plan and commissioned various stakeholders to develop an implementation plan. The division then developed a national digital and future skills strategy aimed at building an ecosystem of education and skills development that provides all South Africans with the skills needed to create and participate in the digital economy.
- With increasing dependence and the transition to online activities in daily life, connecting more South Africans to the internet offers multiple benefits and opportunities across various sectors, such as access to new forms of convenience related to entertainment, communication, commerce, and education for consumers. The internet is an effective promotional tool in the country today and will improve various businesses in the future with connectivity across the world.
