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Online shopping via mobile gets shot of adrenaline

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 10 Nov 2020

Even though the use of mobile for online shopping has been on a steady rise the last couple of years, the COVID-19 pandemic has boosted the adoption rate, giving the e-commerce sector a shot of adrenaline.

This is according to Jonathan Smit, MD and founder of PayFast, speaking during the virtual launch of the PayFast E-commerce Performance Index (PEP Index).

“Historically, there was a lot of browsing on mobile phones but there wasn't a lot of buying necessarily and that's absolutely changed, and is even changing further as we move forward,” says Smit.

The online payment gateway launched its first e-commerce index last week, unpacking how the COVID-19 pandemic has accelerated local e-commerce adoption by as much as three to five years.

The PEP Index was compiled using payment data collected from the PayFast engine from 1 September 2019 to 31 August 2020, buyer data collected from the engine for the same period, an online survey conducted with its merchants in September 2020, as well as interviews with industry experts within the PayFast ecosystem, which were also done in September.

In terms of online shopping behaviour, the PEP Index shows mobile usage for online shopping has grown by 100% year-on-year in 2020, compared to desktops, which has only grown by 22%.

The index further shows that millennials, aged between 25 and 34, continue to be the largest group of online shoppers and are most likely to shop online using their smartphones.

On the other hand, the fastest growing age group of online shoppers are 18- to 24-year olds, with 100% increase in users, reveals the index.

Among the trends that were uncovered is that online shopping peaks between 11am and 12pm, with mostly desktop purchases made during this period. In contrast, mobile usage peaks at 7pm, with the majority of mobile payments taking place between 6pm and 9pm.

“People are engaging on their mobile phones more than ever before,” notes Smit. “Something we’ve talked about for a long time is ‘mobile first’ and the statistics are showing that. When we looked at the number of all sessions happening through the PayFast payment engine, 65% of those sessions came from a smartphone or a tablet versus a desktop device. This is remarkable and drives home how important mobile readiness is for digital businesses.”

SA’s e-commerce sector has been reporting a dramatic uptick in sales since government lifted the lockdown restrictions on online shopping in May.

This trend is expected to continue into this year’s Black Friday / Cyber Monday weekend, as scores of local shoppers avoid malls and opt for online shopping.

PayFast estimates that the 1-2% hold the e-commerce sector had in the retail space will double to as much as a 2-4% share by the end of the year.

Furthermore, the online payment gateway reveals that between April and May this year, it saw a 100% growth in online transactions.

“On a global scale, COVID-19 has set a high bar for what will be considered as baseline e-commerce growth going forward,” Smit points out.

Reflecting on data taken from Black Friday in 2019, PayFast reveals it saw a 50% increase in total payment volumes from October to November 2019. “When e-commerce logistics restrictions were lifted in May, online payment volumes rose by 98%. This growth has been sustained throughout the rest of the year, making for an interesting trend ahead of the coming Black Friday / Cyber Monday weekend.”