PayPal and research group Ipsos have released their latest e-commerce report, showing the biggest online shopping trends in South Africa, and what is expected in the market over the next few years.
According to PayPal, the research shows that online shopping and e-commerce is on a steady rise locally, with almost 70% of all active online adults making use of online shopping in some form over the past 12 months.
This is estimated to bring in R45.3 billion by the end of 2018, a rather large 19% leap from 2017’s figures. It’s also expected to accelerate, with PayPal projecting that online spend will hit R62 billion by 2020.
The report highlighted the following three trends when it comes to e-commerce in South Africa:
South Africans shop globally
According to PayPal 62% of South African online shoppers purchased something from an overseas retailer in the last 12 months, compared to 43% in the previous year.
Clothing/apparel, footwear and accessories are the most common cross-border purchasees (68%) with jewellery/watches (62%) second most popular and consumer electronics, computers/tablets/mobiles and peripherals being the third purchase of choice (54%).
“South African online shoppers have realised that buying from overseas is not the hassle it once was, and that they can purchase must have items, often at a better price,” the group said.
South African online shoppers purchasing from overseas chose the US as their online shopping destination of choice (34%) due to better prices, availability and variety of styles, followed by China (28%) and the UK (16%).
The research also indicated that Christmas, Black Friday and seasonal sales are the three top occasions for shopping cross-border more frequently than usual.
Mobile is driving online shopping
South Africans are looking for more convenient ways to approach e-commerce, and this is being catered for by mobile, PayPal said.
The research indicated that 62% of online shoppers have used their mobile device for their purchases, resulting in an estimated R14.9 billion spend in 2018 (33% of the total). This is estimated to grow to a R30.4 billion by 2020 (49% of the total), doubling in value from 2018.
“Mobile technology is transforming e-commerce in Africa, and consumers are more likely to have a mobile device than a bank account,” the group said.
“South Africans are becoming more comfortable with mobile shopping due to easy-to-use apps for ordering car rides or food becoming commonplace.”
Shoppers still have some serious concerns
Despite the rapid growth of e-commerce in South Africa, people still carry the worries associated with being online.
Over 30% of online shoppers are concerned that they may not receive their purchased item when shopping cross-border, and 24% fret over a difficult returns process.
A quarter (24%) have concerns about identity theft and fraud, as well as the security of their financial details when shopping domestically.
PayPal said that its Buyer Protection or Refunded Returns offering, which can be applied to eligible purchases, protects against some of these worries, with the research showing that shoppers tend to stick with merchants and vendors that they trust.