E-Commerce in South Africa

E-commerce is gaining traction in the South African market, particularly in remote places where traditional distribution systems are too expensive. To compete with mail-order enterprises, almost all traditional markets now have a website, and many outsource delivery to a third party.

South Africa e-commerce Statistics in 2024:

South Africa holds the 48th position among the largest eCommerce markets, poised to reach an estimated revenue of US$4,542.9 million by 2024, surpassing Ukraine. Anticipating steady growth, the market is projected to exhibit a compound annual growth rate (CAGR 2024-2028) of 9.3%, reaching a market volume of US$6,494.9 million by 2028. The South African eCommerce sector, contributing to the global growth rate of 10.4% in 2024, is expected to see a notable 12.3% increase in 2024. This aligns with the broader trend of rising e-commerce sales globally.

Within South Africa’s eCommerce market, seven key sectors are recognized by ECDB. Electronics takes the lead, constituting 25.8% of the revenue, followed by Fashion at 20.7%, Hobby & Leisure at 19.9%, Furniture & Homeware at 11.5%, Care Products at 7.8%, Grocery at 7.3%, and DIY wrapping up with the remaining 6.9%.

In South Africa, B2B and B2C consumers are treated the same, therefore interactions are similar. Both have become accustomed to conducting product research on the Internet. As a result, both sorts of clients use consumer and business-to-business websites to buy items and services for their businesses or themselves.

E-Commerce platforms in South Africa:

The number of South Africans shopping online has increased massively in today’s fast-moving society because of the rapidly improved accessibility and because people become increasingly used to online shopping.

On Thursday, many South African businesses breathed a collective sigh of relief when the Presidency announced that all eCommerce stores could operate under Level 4 Lockdown.

A select few businesses will be able to resume production and online sales. Companies that do not have eCommerce stores, on the other hand, risk being left in the dust if they do not jump on the eCommerce bandwagon soon.

Here we will discuss and explain some of the E-Commerce platforms in South Africa:

• WooCommerce:

WooCommerce has become one of the largest and most popular eCommerce platforms. It is a WordPress plugin that will transform your WordPress website into a powerful online store. It’s no big deal, then, that Make significant changes, the company behind WordPress, added this hugely successful plugin to its portfolio back in 2015.

• Shopify:

Shopify is a commerce platform that enables users to create and sell an online store. Retailers can also sell their goods in person using Shopify POS. All you have to do is pay the monthly fee, drag and drop elements, and you’re ready to sell your goods online. There is also a market where you can buy themes and addons for Shopify. The majority of these are paid, with only a few high-quality free options.

• Squarespace Online Stores:

Squarespace is a wholly-owned American company headquartered in New York City that offers software as a service for website creation and hosting. Its customers create web pages using pre-built website templates and drag-and-drop elements. Squarespace caters to customers who want a professional-looking and fast website without having to deal with hosting or security issues.

• PrestaShop:

PrestaShop is a free-to-use locally hosted platform. With the prices of PrestaShop plugins and themes, you could end up paying a fortune to build the shop you want. Furthermore, customizing your online store necessitates specialized programming skills.

• Magento:

Magento is an e-commerce platform used by major corporations such as Nike and Coca-Cola. Magento is a very structurally and functionally customizable platform that requires a competent programmer to set up and maintain. Magento is free to use, but there are paid plans available for enterprise solutions and large businesses.

• Wix:

Wix, like Shopify, is a membership full eCommerce solution. You sign up online and can begin building your store right away. Wix also charges a monthly fee to use their platform. They have four different monthly plans to choose from, each with its own set of features.

 

Growth of e-commerce in South Africa:

South Africa’s e-commerce economy appears to be on a meteoric rise. According to FNB, the average e-commerce expenses increased by 30% in the first half of 2020 than last year. Rand Merchant Bank predicts that the sector’s value will increase by 150 percent over the next five years, to R225 billion.

The consequences of the global coronavirus pandemic have fueled market growth in 2020. Online shopping has skyrocketed. More South Africans are shopping online today than ever before, whether due to a fear of safety in crowded, enclosed spaces or a greater awareness of digital convenience.

Nonetheless, despite significant growth in online retail, South Africa’s e-commerce market remains behind the global curve. According to Euromonitor, South Africa’s online spending accounts for only 2% of all retail transactions, compared to the global average of 16%. As a result, the South African online market remains largely untapped. According to Statista market and consumer data, 31.6 million South Africans could be converted to online shopping by 2024 – but significant challenges remain.

Customers are still primarily reliant on cash sales, and while this is shifting with the approval of card-based payments, first-time purchasers have recognized that trust issues with online systems do exist. “We need to engage educationally to drive consumers and teach them about the safety mechanisms in place that make online shopping and payment functionality safe,” Theunissen mentions.

Conclusion:

This adaptable alternative to traditional delivery services is allowing e-commerce to thrive in South Africa by ensuring no more failed deliveries. For the time being, traditional retailers still reign supreme in South Africa; however, with nearly half of the population planning to make an online purchase in the coming year, it is clear that the eCommerce market has enormous potential and will continue to grow year after year.

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