Subscribe

Most SA consumers still wary of e-commerce

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 27 Jun 2016
Only three million South Africans shop online regularly, but their combined spend for the year is predicted to near R10 billion.
Only three million South Africans shop online regularly, but their combined spend for the year is predicted to near R10 billion.

When the price of broadband goes down, and as smartphone penetration rises, South Africans will be less wary of shopping online.

Vuyo Mpako, head of digital channels and e-commerce at Standard Bank, says only three million South Africans make use of e-commerce at the moment. However, online purchases are expected to near R10 billion in SA this year.

Mpako says this shows the true potential of e-commerce in the country, as the value of purchases made annually is increasing steadily, even though only a relatively small portion of the population shops online regularly.

Two of the major problems facing South Africans are limited access to the Internet and the cost of broadband, says Mpako.

He adds that uncapped access to fibre networks may be increasing in homes across the country, but the cost (usually more than R600 a month) restricts access to those in higher income brackets.

"As making homeowners' access to fibre a viable economic proposition relies on high consumer take-up numbers, suppliers naturally target major urban areas. For e-commerce to become popular beyond these limits, the traditional barriers of large distances and poor infrastructure have to be overcome."

Mpako says there are several factors that impact e-commerce sales locally. They are a lack of trust in making online transactions; Internet purchases can only be made if the shopper has a credit card; the Internet isn't cheaper than local shops; and South Africans mostly buy non-food items.

Driven by youth

"Increasing use of e-shopping will be made by young South Africans who have high levels of computer literacy and are comfortable with using applications, or apps, that make access to services easier.

"Presently, this sector, comprising people between the ages of 25 and 35, makes up the bulk of e-commerce users. Not surprisingly, young South Africans between the ages of 25 and 34 make up the bulk of e-shoppers, followed by those between 35 and 44 - about 16% of the total," says Mpako.

The increasing market penetration of smartphones is set to add further impetus to the use of online stores, he adds.

"While South Africa's Internet penetration lies at 34%, mobile phone penetration lies at 86%, according to World Wide Worx numbers, and probably more than 50% of the adult population. As these mobile devices become more sophisticated, they bring easier access to streams of information and opportunities.

Mpako says there is no doubt that as smartphone adoption levels increase, local consumers will see the value e-commerce offers.

"As this occurs, more people will come to trust the medium, realising the time saving benefit and potential for the medium to add real value to their lives. This will boost e-commerce and see larger numbers of South Africans moving into a digital shopping environment," concludes Mpako.

Share