Online retail sector grows in South Africa

04 Jan 2019

online shoppingAs the ecommerce trend expands, online retail in South Africa is forecast to have exceeded the R14-billion mark in 2018.

According to the World Wide Worx’s study, named Online Retail in South Africa, 2018 recorded 25% growth over 2017 – which was an unexpected result, considering predictions of a slowdown below 20%.

My Broadband reports that large investments in online retail, aggressive marketing, and vast adoption of new mobile shopping channels have all played a role in combatting the negative predictions seen earlier on.

The report says, “Online retailers in South Africa still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover, and employee numbers.”

Online retail in South Africa was found to be heavily dominated by apparel – despite also featuring as the sector with the highest turnover of businesses.

“Apparel illustrates the perils of a low barrier to entry – the survival rate of online stores in this sector is probably directly proportionate to the ease of setting up an online apparel store.”

Other prominent sectors include the General category, Décor, Alcohol, Tobacco and Vaping, Food and Groceries as well as Home purchases.

The group said, “However, profits in ecommerce are no definite indicator of long-term sustainability.

“Young online retailers who do not reinvest in the underpinnings of their business may be sacrificing short-term financial gain for long-term survival.