While e-commerce is on the upswing in SA, consumers are still hesitant to pull the trigger for big purchases which they still prefer to buy offline. This is according to the local findings from the global Visa E-commerce Tracker Survey.
The survey seeks to gauge the attitude towards online payments, and tracked 8 000 Internet users between the ages of 18 and 55 across eight countries, including SA, Hong Kong, South Korea, Japan, Singapore, Vietnam, Russia and the Philippines.
Head of emerging products in Africa for Visa, Dougie Henderson, says despite the low level of Internet penetration in SA (14%), e-commerce is widely used. "Internet access via mobile phones is particularly popular. Mobile Internet is accessed by 68% of Internet users and is the preferred device for Internet connectivity."
According to the survey, 99% of South African respondents said they browsed online for products and services in the last 12 months. Over the same period, Henderson says there has been a slow expansion of South Africans making purchases online. Top growth categories were fashion (78%), health and wellness (59%), and automotive and accessories (56%).
Despite the growth in those categories, there remain a large number of products and services that South African consumers will browse for online, but still prefer to purchase offline.
"This includes large ticket items such as PCs/laptops/tablets and household electronics, where 24% browse online before buying offline. When it comes to personal electronics, 23% browse online before buying offline and for financial services products 19% browse online before buying offline," says Henderson.
According to the survey, the top three reasons for switching to offline payments after browsing included concerns over additional shipping and handling fees (41%), the fear that goods would not arrive or not arrive on time (40%), and concerns that the goods would not arrive as per specifications (40%). Overall, however, the perception of online security has improved in SA, with 65% of respondents saying they feel more secure making online purchases now than they did two years ago.
The top five most browsed categories in the last year in SA were physical books, CDs and DVDs (37%), holidays/travel (36%), bill payment (35%), PCs/laptops/tablets and household electronics (34%), and event/concert tickets (32%).
Participation curve
The survey findings correlate with those of the MasterCard Worldwide Online Shopping survey from earlier this year.
Conducted across 25 markets between December 2011 and January 2012, the survey included South African banked customers who access the Internet at least once a week.
The results showed a significant increase in online shopping among South Africans, with 58% of respondents saying they use the Internet for online shopping. This is an increase from the 44% who did online shopping in 2009, and 53% from 2010.
The results of the MasterCard survey were cross-referenced with the findings of local research firm, World Wide Worx. Arthur Goldstuck, MD of World Wide Worx, said at the time that the digital participation curve is a key indicator of the propensity for online shopping.
"There are currently 8.5 million people online and only 3.5 million who have been online for five or more years. Propensity for online shopping is heavily dependent on the user's confidence in the entire online eco-system," says Goldstuck.
"Once people are experienced Internet users and go online regularly, their propensity to shop online increases dramatically. The key is to convert that propensity into shopping behaviour."
Goldstuck says from 2013, the participation curve will rise significantly and quickly, which will in turn lead to growth in the number of online shoppers and an increase in the online shopping options available for customers.
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