South Africa’s E-commerce sector to witness exponential growth into future

SOUTH AFRICA – While many sectors of the economy were crippled by varying degrees of disruptions caused by the COVID-19 pandemic, South Africa’s E-commerce industry has witnessed increased growth.

Some of this growth, fuelled by lockdowns or stay at home directives are expected to hold up as the new normal triggers culture shift for the long term.

According to a recent report by Research and Markets, the sector is poised to reach US$ 7.9 Billion by 2027 from US$4.5 billion in 2021.

The increased appetite of South Africans for online shopping has not gone unnoticed by retailers and food service providers as they seek to offer customers greater freedom and more options to transact.

Players such as Shoprite, Massmart, Pick n Pay, and KFC SA have established their in-house ecommerce arm i.e. Checkers Sixty60, OneCart, Pick n Pay ASAP!, and KFC Delivery Plus to fulfil their orders.

Meanwhile the likes of Delivery Hero, Takealot, Bolt Foods, Jumia, among others have enabled businesses to leverage on the growing ecommerce arena by offering third part services.

Other than the business-to-customer (B2C) model, e-commerce is also deployed through business-to-business (B2B), customer-to-customer (C2C), and customer-to-business (C2B).

These platforms provide several advantages compared to conventional brick-and-mortar solutions, such as inventory cost, control, improved profit margins, numerous discounts, and hassle-free delivery of goods and services.

Internet penetration fans growth of E-commerce

Also, the rising penetration of smart devices and the growing internet connectivity have led to e-commerce platforms.

Apart from this, the increasing integration of e-commerce platforms with various advanced technologies, such as cloud computing, artificial intelligence, predictive analytics, etc., is also bolstering the e-commerce market growth in South Africa.

According to the research findings, there were more than 18 million e-commerce users in South Africa, with an additional more than 6 million users shopping online.

On the basis of Payment Mode, various digital payments such as Bank Transfers, Cards, Cash on Delivery (COD), Direct Delivery and E-wallet are becoming more widespread in South African countries.

Notwithstanding, another standard payment method is direct delivery, which indicates that users pay for their order on delivery.

Despite the exponential growth, players in the market need to innovate and invest in overcoming challenges that belabour the e-commerce sector in South Africa.

Data costs remain incredibly high, residential addressing system is not well defined, and access infrastructure such as internal road and rail system is not up to par, indicates Geo Poll.

Insecurity also remains high, and many South Africans still have trust issues with shopping and paying remotely.

Once these challenges are met, e-commerce in South Africa should be able to break the ceiling and achieve the immense opportunity it holds.

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