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Online retail space still emerging in SA

Regina Pazvakavambwa
By Regina Pazvakavambwa
Johannesburg, 20 Apr 2016
Everything in the e-commerce environment needs to start and end with the customer and their specific requirements, says Foschini's Robyn Cooke.
Everything in the e-commerce environment needs to start and end with the customer and their specific requirements, says Foschini's Robyn Cooke.

The South African online retail space is still in relatively early online trading days and is different from that of developed countries.

This is according to Robyn Cooke, head of e-commerce at the Foschini Group, who notes the most important trend at the moment in global e-commerce is the focus on the customer journey.

There is the overarching drive for convenience and customised experience for the millennial customer as well as user generated content and a fleshed-out experience when shopping, she says.

This has yet to happen in the South African market as it is an emerging market, she adds. However the pressure is on for this to be reality in the next four to five years and retailers should already be in the planning stage to meet this need, notes Cooke.

According to Statista, revenue in the South African "e-commerce" market amounts to $3 188 million in 2016. And is expected to show an annual growth rate (CAGR 2016-2020) of 15.98% resulting in a market volume of $5 769 million in 2020.

The market's largest segment is the "consumer electronics and physical media" with a market volume of $1 159.5 million in 2016, it adds.

Statista says user penetration is at 46.10% in 2016 and is expected to hit 59.98% in 2020 with the average revenue per user currently amounting to $183.54.

Everything in the e-commerce environment needs to start and end with the customer and their specific requirements, asserts Cooke.

Lauren Foye, research analyst at Juniper Research, says the digital commerce market as a whole is seeing an ever-increasing propensity towards an omni-channel approach, and this extends to e-commerce where the mobile and tablet platform is seeing increased use towards the purchasing of physical goods, either for delivery or collection.

According to a World Wide Worx recent report, online retail continues to grow at a high rate in SA, having maintained a growth rate of above 20% since the turn of the century.

However, World Wide Worx MD Arthur Goldstuck says the online retail in SA is often characterised as being undeveloped, behind the curve and lagging behind Western markets.

"Even retailers themselves use this kind of terminology. However, this often also results in an underestimation of the healthy growth rate of online retail in this country."