South African online retail sales jumped 66% in 2020

A pandemic-fuelled online shopping boom lifted South Africa’s e-commerce sales by 66% last year to more than R30-billion, according to a new research report published on Wednesday.

World Wide Worx said online sales in South Africa have more than doubled in two years to R30.2-billion as consumers become more accustomed to buying goods and services online, particularly after the country was put into lockdown in March 2020 due to Covid-19.

“The most astonishing aspect of this total is that it is more than double the R14.1-billion reached in 2018, in just two years,” said World Wide Worx MD Arthur Goldstuck, principal analyst on the research project, in a statement. “It is also 50% higher than the total forecast for 2020 three years ago, when online retail in South Africa was expected to reach R20-billion by 2020.”

The growth came despite a slump in traditional retail last year, brought on by Covid-19 lockdowns and the associated job losses and erosion of the economy.

In 2018, the R14.1-billion in online retail represented 1.4% of total retail, estimated at the time at R1.07-trillion. According to preliminary data from Statistics South Africa, at current prices, total retail fell by 4.2% to R1.05-trillion. The percentage of retail made up by online retail sales came to 2.8% – double the percentage for 2018, according to World Wide Worx.

Growth to continue

“While equivalent growth cannot be expected for 2021, it can be stated fairly confidently that it will exceed the 30% growth of 2019, when expansion was organic and a factor of the evolution of shopping habits and retail strategies,” said Goldstuck. “Those factors remain in place, along with the massive boost given to both areas of evolution since the pandemic began.”

Total online sales in South Africa should reach about R42-billion in 2021, taking the online percentage of total retail to around 4%, assuming traditional retail returns to its previous growth path, World Wide Worx said in the statement.

The categories experiencing the highest growth, aside from data and airtime top-up, were clothing, at 56%, and groceries, at 54%.

More than two-thirds – 68% – of these consumers said they used the time during the pandemic as a positive learning experience, while the demand for online entertainment also surged, with 52% of respondents saying they have spent more money on virtual experiences than they did before the pandemic.

The first component of the report, published on Wednesday, is based on data drawn from the TGI consumer survey of 16 000 participants, conducted by Ask Afrika over six months. Further components of the report will be released later in the year, including a look at the performance of local online retailers and insights into global trends.  — © 2021 NewsCentral Media

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