Local is not always lekker when it comes to online shopping in South Africa
A new report by PayPal and Ipsos finds that South African online spend is forecast to grow to more than R53 billion by 2018.
The research indicated that 58% of online adults in South Africa shopped online over the past 12 months, amounting to an estimated total spend of R37.1 billion.
The global insights research, which investigated the online domestic and cross-border shopping habits of more than 28,000 consumers in 32 countries, including South Africa, found that in 2016, 43% of local adults shopped cross-border.
The main drivers that would encourage online shoppers to buy cross-border online are: free shipping (60% of respondents), availability of local currency for payment (58%) and a secure way to pay (56%).
An estimated 1.4 million South Africans shopped internationally, spending an estimated R8.8 billion, the report found. Cross-border shopping is estimated to grow by 38% in 2017 based on shoppers own predictions, PayPal said.
The US is the most popular cross-border online shopping destination for South African online shoppers, followed by China and the UK.
The research showed that South African cross-border shoppers who buy from the US do so because of the access to products that they cannot find locally, while overseas buying opens up the discovery of ‘new and interesting products’ (59%). The respondents also cited reputation of online stores in the US (59%) as a reason for buying there.
The top reason to buy from China is cheaper prices, and for the UK the access to items not available in their own country.
More than 7 out of 10 (72%) locally based online shoppers admitted to abandoning a cross-border purchase. The main reasons for this abandonment include high shipping costs (55%), uncertainty about duties/taxes/customs fees (33%) and long delivery times (32%).
The top three reasons preventing shoppers from making cross-border purchases are delivery or shipping costs (48%), having to pay customs fees (46%) and concerns that they might not receive the item (41%).
When it comes to buying products online, the most popular online categories for South African consumers were downloadable digital entertainment and education items (purchased by 53% of online shoppers in the past 12 months), event tickets (47%), and clothing, apparel, or footwear (45%).
The increase in online spending is also forecast to continue, with over half of online adults interviewed (53%) saying they will increase their online spending in the next 12 months, citing convenience of shopping online, planning to save more money, and change in disposable income as reasons for the expected increase.
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