Online retail sales growing in South Africa

Online retail in South Africa seems to have moved into a cycle of sustained acceleration, based on a new research report published recently by World Wide Worx.

The Online Retail in SA 2011 research project reveals that the total spent on online retail goods in South Africa surpassed the R2-billion mark in 2010 for the very first time. It climbed to R2.028-billion, growing at 30% over the previous year.


Bullish Trends

Online retailers are substantially more bullish when it comes to 2011, with the industry consensus pointing to 40% growth this coming year. This will certainly signify the highest rate of growth when it comes to online retail in South Africa in almost a decade.

“This extraordinary surge in online retail comes in the wake of a constant rise in the volume of knowledgeable internet users in South Africa,” mentioned World Wide Worx MD and principal analyst for the survey, Arthur Goldstuck, in a report last week.

“During the past year there were 3.6-mlilion people who had been online for five years or more. By 2015, this figure will most likely be 6.8-million – pretty much double the potential e-commerce market of today.”

In 2010, Conventional, physical retail in South Africa reached R561-billion, as outlined by Stats SA. Which means that online retail still accocunts for less than half a per cent of total retail in SA: a miniscule 0.36%. Having said that, however, the growth rate of online retail in South Africa in 2010 ended up being four times that of physical retail: 30% versus 7%.


Change in purchasing activity

Globally, according to global online retail data analysed in the report, growth slowed down in the majority of regions throughout the global economic crisis, however failed to turn negative: total sales in no way fell anywhere in the world.

Industry estimates for the total value of global online retail in 2010 come to an average of approximately US$545-billion, up from $469-billion in 2009.

This suggests that, internationally as with South Africa, online retail is recession-proof for the time being, even though it still accocunts for a tiny proportion of total retail worldwide.

“This indicates to us that online retail growth represents not a rise in shopping activity, but instead a shift in shopping activity, from the physical space to the online space,” said Goldstuck.





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