South African consumers are shopping online this holiday season, according to Ernst & Young

This holiday season, consumers around the world are expected to shop around the clock over the Internet. According to Ernst & Young`s fourth annual Global Internet Retailing study, 4 571 online shoppers in 12 countries surveyed report they have spent an average of R5 523 on the Internet over the last twelve months, compared to R3 682 in South Africa. In addition, the South African consumers surveyed estimate they will spend 11 percent of their total holiday purchases over the Internet, up from 6 percent a year ago.

All indications are that online retailing in South Africa is growing. While South African figures are generally below global averages, it is interesting to note that, in almost every instance, the South African statistics are ahead of last year`s global averages. In 2000, ten percent of online shoppers globally plan to do at least 50 percent of their holiday shopping online, up from 5 percent in 1999. In South Africa, the number is 6 percent. Conversely, the number of online consumers globally who have no plans to shop online during the holidays dropped in half -- from 50 percent last year to 25 percent this year. In South Africa 42 percent do not plan to shop online this holiday season.

"We expect to see steady growth in online sales over the Christmas period," says Ian Catt, National Director of Retail and Consumer Products at Ernst & Young. "South African retailers are faced with challenging economic circumstances, and many remain circumspect about the prospects for e-commerce in this country. However, our research shows that more consumers are going online, and that many of these consumers are beginning to expect online offers. Online initiatives by established brands like Edgars and Woolworths will further extend the appeal of the online channel".

Shoppers Go Broad and Deep Into New Online Categories This Season

This holiday season, South African online consumers are expected to shop in broader categories than before. In addition to books, CDs and computers, top categories for online buyers this year now include financial services for the first time.

Most popular South African online categories from which consumers purchased over the last 12 months (percent represents number of consumers who purchased in the category over the last 12 months) are:

• Books (62 percent)

• CDs/Recorded Music (33 percent)

• Computers (30 percent)

• Tickets/reservations (29 percent)

• Financial services (14 percent)

However, according to Ian Catt, these sales categories only tell half the story:

"The B2C channel is certainly about sales, but it is also about marketing, communication, entrenching the brand, and deepening the relationship with the customer. Rather than looking to simply import an internet-based, catalogue-type business model, South African companies must look at innovative ways of personalising the entire retail experience, both online and offline" said Catt. "We see the winners as those companies who are implementing a multi-channel strategy, where electronic channels are viewed as a complement rather than an alternative to in-store shopping."

Online Convenience is King Again This Holiday Season

The reasons why consumers around the world like to do their holiday shopping online are consistent with last year`s findings - saving time is the main driver. Those South African consumers who will plan to spend the same or more online in 2000 compared to 1999 prefer shopping online because:

• Saves time (64%)

• More convenient shopping hours (51%)

• Stores/malls too crowded (42%)

• Less driving (40%)

The "New" Online Shopper?

While men continue to make up the vast majority of online shoppers in South Africa this year, the profile of the average online shopper continues to evolve:

• 66% are men

• 59% are married or live with their partner

• 49% are age 30-49; 11% are over 50; 39% are 18-29; the average age is 35 years old

• Buyers with children outweigh buyers without, 58% vs. 42%

The holiday online shopping study in South Africa was conducted in conjunction with Ernst & Young`s comprehensive Global Online Retailing study of more than 7,000 consumers in 12 countries, including Australia, Brazil, Canada, France, Germany, Israel, Netherlands, Spain, Switzerland, United Kingdom and the United States. The findings of the full study will be presented at the US National Retail Federation`s annual conference on January 16, 2001 in New York. There will be a simultaneous release of the findings through the South African media.