Shoppers splurge online

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 08 Dec 2014
About R6 billion will be spent online this year, according to World Wide Worx.
About R6 billion will be spent online this year, according to World Wide Worx.

Online spending is growing at "sensational" rates, as South Africans increasingly move shopping to virtual retailers and - while online spending is a fraction of traditional retail - the pace of growth is outpacing that seen in old-fashioned outlets.

First National Bank's eBucks unit has compiled its annual festive shopping survey and noted the number of people embracing online shopping - especially during the festive season - continues to gather pace. The rewards programme, which has seen spend grow from R163 million to R189 million in about a week, says 14% of all respondents to the survey will move all their shopping online this year.

This, says eBucks, is an increase from the 10% seen last year, and the 8% recorded in 2012. In addition, more than half those who answered the survey - 54% - will shop on- and offline this year, a gain from the 48% seen last year.

Shoppers' moves online is also evidenced in figures compiled by World Wide Worx, which says the online retail sector will be worth R5.9 billion this year, a gain from the R4.4 billion seen last year. Its October report on online retail notes the sector is expected to grow at 35% this year, up from 31% in 2013 and 28% in 2012.

Gaining traction

Growth in online stores is outpacing that seen by traditional retailers, although e-commerce is gaining off a small base. According to Statistics SA's third quarter retail trade sales figures, the overall sector gained 8% year-on-year in September, reporting sales of R190 billion for the three months.

Kirby Gordon, head of brand and communication at, notes the "year-on-year increase in sales has been really sensational". Although she could not divulge numbers, it's clear South Africans "are really starting to appreciate the benefits of shopping online". marketing manager Megan Biebuyck adds the site is "seeing massive growth in new users, with more South Africans becoming comfortable with the concept of online shopping".

What people are buying online:

50.7%: Electronics and gadgets
44.4%: Books/e-books
38.6%: Entertainment (concert tickets, theatre tickets, etc)
37.6%: Music, movies and box sets
32.7%: Vouchers
29.0%: Kids toys
23.0%: Appliances (coffee machines, TVs, etc)
18.1%: Clothing
13.4%: Beauty products (perfume, aftershave, makeup, etc)
7.5%: Jewellery
4.9%: Fitness or sporting equipment
Source: eBucks survey

eBucks says its 2 444 respondents - surveyed in the second half of November - cite factors such as price comparison abilities, convenience, delivery options and finding unique items that are not available in-store as the motivation for going online to spend. According to the survey, the top three online purchases are electronics and gadgets, books and e-books, and entertainment such as concert and theatre tickets.

"As more South Africans go online, it's clear that people are also moving some of their shopping online - even for high-end goods such as smart devices and televisions," says Joland'e Duvenage, CEO of eBucks Rewards. "South African shoppers are becoming more comfortable with online shopping, especially as they can compare prices from a variety of retailers at a time and place convenient to them."

Increasing competition

World Wide Worx notes there will be around 15.6 million Internet users this year, a figure that is expected to grow to 20.5 million by 2020. Of those online in 2014, 5.3 million have been using the Internet for five years or more, which - based on the research company's experience curve - means this is the size of the potential pool of shoppers, a figure set to grow to 17.2 million in 2020.

Gordon says, year-on-year, there have been two major shifts that are pushing people online: the continuing trend of people moving surfing habits to mobile devices, and an extension into new categories. "These days, the baskets are far more mixed, as people enjoy the opportunity to do everything from stocking up on sunscreen and beauty products for the summer, to purchasing power tools, appliances or outdoor camping gear."

For next year, says Gordon, expects growth to continue along the same vein, and is "very excited" about the ever-increasing role mobile devices are playing in the e-commerce space. She adds there will also be an increase in competition as traditional brick-and-mortar retailers are investing heavily and coming online, and international entities like Amazon and Alibaba are also making a play in South Africa.