Research by World Wide Worx and Mastercard suggests that online retail in South Africa grew by 35% to R55 billion in 2022, with online sales boosted by the promotional shopping day Black Friday.
According to the Online Retail in South Africa 2022 study, this year’s winners were Shoprite-owned on-demand grocery delivery service Checkers Sixty60, clothing and homeware retailer Mr Price, and grocery retail giant Pick n Pay.
The report found that these retailers enjoyed the biggest increases in turnover and/or online retail sales.
World Wide Worx uses accumulated figures and projections from listed companies, interviews with unlisted online retailers and data on card transactions to make inferences about the state of the online retail space.
“One can call this the pandemic dividend,” World Wide Worx MD and principal analyst on the research project Arthur Goldstuck says in a statement.
“The 2020 boom in home deliveries has continued for the past two years, as retailers compete aggressively in every area of online shopping.”
Shifts in behaviour
The study found that because the online retail boom comes at the same time as the industry is battling stagnation, the boom is a result of a shift in consumer behaviour and shopping preferences, rather than a general uptick in demand.
Mastercard country manager Gabriel Swanepoel says this shift can be linked to the consumer behaviour changes brought on by the Covid-19 pandemic.
“Since physical shopping was limited during the hard lockdown, it was during this time that we first saw a rise in consumers resorting to online shopping,” says Swanepoel.
“Due to this, consumers got comfortable – but with the comfort of use we are seeing emerging consumer needs and expectations that go beyond being able to shop online.”
The study further observed that for consumers to commit to spending on retailers’ online platforms, a high level of security, as well as a fast delivery service, have to be top of the list for the retailer.
“Lastly, we are seeing consumers wanting an omnichannel shopping experience that allows customers to pick up where they left off on one channel and continue the experience on another,” says Swanepoel.
“Consequently, consumer attitudes seem to have changed, and we anticipate that with those changes we will see the evolution of online shopping and some interesting innovations from the retailers, thus responding to these changes.”
In 2021, at R42.3 billion, online sales made up 4% of SA’s total shopping spend of R1.166 trillion, which the study says this marked “healthy growth from the 2.8% recorded in 2020″.
“In 2022, with total retail expected to reach R1.16 trillion, online retail [is expected to] make up 4.7% of the total.”
“Total online retail comfortably surpassed our previous forecast of R52 billion for 2022,” says Goldstuck.
“However, it will fall just below the 5% mark, a milestone that had previously been anticipated for the end of 2022. We are confident it will be reached in 2023.”
