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Online commerce in SA to reach R45bn this year

By 2020, the figure is expected to rise to R61 billion.

South Africans will spend more than R45 billion online in 2018, with over 60% of buyers making a purchase from an overseas retailer, new research by Ipsos, for PayPal, has revealed. By 2020, the figure will rise to R61 billion.

The fourth annual PayPal and Ipsos cross-border e-commerce report shows that 69% of active online South African adults shopped online in the past 12 months, bringing total estimated spend in 2018 to R45.3 billion — a 19% increase over 2017.

“Online shopping is expected to increase even more over the next 24 months, with a forecast total spend of R61.9 billion in 2020, a 36% increase from 2018,” the companies said. “The reason is 75% of adults interviewed indicated the convenience of shopping online.”

The three most popular online shopping categories for South African consumers who shop online are clothing and apparel (53%), entertainment and education (digital/downloadable) (51%), and event tickets (51%).

62% of South African online shoppers purchased something from an overseas retailer in the past 12 months, compared to 43% in the previous year. Clothing and apparel, footwear and accessories came in as the most common cross-border purchase (68%), with jewellery and watches second at 62%. Consumer electronics, computers/tablets/mobiles and peripherals was the third purchase of choice (54%).

“South African online shoppers have realised that buying from overseas is not the hassle it once was, and that they can purchase must have items, often at a better price,” said Efi Dahan, GM for PayPal Russia, Middle East and Africa, in a statement.

South African online shoppers purchasing from overseas chose the US as their online shopping destination of choice (34%) due to better prices, availability and variety of styles, followed by China (28%) and the UK (16%). The research showed that Christmas, Black Friday and seasonal sales are the three top occasions for shopping cross-border more frequently than usual.

M-commerce

Mobile-based shopping is growing strongly, the research found. 62% of online shoppers have used their mobile device for purchases, resulting in an estimated R14.9 billion in spend in 2018. This is forecast to grow to a R30.4 billion by 2020, doubling in value from 2018.

“Mobile technology is transforming e-commerce in Africa, and consumers are more likely to have a mobile device than a bank account,” said Dahan. “South Africans are becoming more comfortable with mobile shopping due to easy-to-use apps for ordering car rides or food becoming commonplace.”

Interviews in South Africa were carried out between 27 March and 17 April 2018 among a sample of 1 003 interviewees. Of those interviewed, 845 were online shoppers who had made a purchase on the Internet and 523 were identified as cross-border shoppers.

This article was published with the permission of Tech Central, the original publication can be viewed here

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My biggest problem with online commerce is delivery. I can order things from China for 1$, postage included, but the Post Office takes ages delivering it (if ever). Last time I ordered something from China I paid a little extra to be sent via registered mail, so I could track it. According to the Post Office’s tracking website it arrived to Joburg after a week, then it sat there for 3 months before finally got to Cape Town.

At say R50b online spend by south africans, and suspecting that a chunk of that is not subject to VAT (eg subscriptions rather than goods caught by customs VAT), there is probably five billion in taxes to be collected…

“The three most popular online shopping categories for South African consumers who shop online are clothing and apparel (53%), entertainment and education (digital/downloadable) (51%), and event tickets (51%)” – so the three most popular categories account for 155% of the total..??

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