Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and , reputable, prominent B2B websites.
Assessment of Current Buyer Behaviour in Market
The top e-Commerce product category in South Africa is clothing and apparel followed by media products. There is also growth in most food delivery platforms both grocery and fast food/convenience. UberEATS is available in South Africa and competes with the local platform called Mr Delivery. Consumers are price sensitive favoring online promotions and coupons. South Africans are spending more time online researching better prices and seeking product recommendations on social media.
Local eCommerce Sales & Regulations
South Africans purchase mostly from South African websites or online market places, but 27% purchase from the United States, and 14% from Europe. The U.S. version of Amazon.com is the third most visited e-commerce website in South Africa. If a South African imports goods in excess of ZAR10 000 ($580) or more than three times a year they will have to get an importers code, irrespective if it is for personal or business use.
Credit card and debit cards are the most preferred payment methods. Consumers also use e-wallet services and EFT for online payment. Due to the growth of credit card fraud, the Payment Association of South Africa mandated the use of 3D Secure in 2014. Merchants have reported that increased flexibility in the application of 3D Secure to online transactions in recent years has reduced cart abandonment by consumers. Currently around 71% of potential customers abandon their carts because of payment gateway failure.
Cell phones have largely replaced wallets, as banks, card operators, retailers and communications companies provide alternatives to cash as a means of payment. M-commerce, where cell phones are used to pay for goods and services, has advanced beyond mobile banking to debit and credit transactions. M-commerce is particularly attractive in South Africa due to the rapid increase in the number of smart phones, and poor fixed-line infrastructure. This provides an immense opportunity for online retailers, as mobile spend is projected to increase. Companies need to include mobile optimization in their ecommerce offerings to increase the buying experience.
Social media platforms are becoming more pervasive as marketing tools in South Africa. More than 90% of South African major brands advertise on social media platforms. On a consumer level, growth for most networks has slowed down, but engagement by users has intensified.
Major Buying Holidays
International online sale days such as Black Friday and Cyber Monday are popular in South Africa and offer opportunities for retailers to reach more customers.