South Africa: A treasure land for cross-border e-commerce in Africa, with unlimited potential
As Africa’s second largest economy, South Africa’s e-commerce started late – in 2016, the country’s online retail sales accounted for only 1% of the country’s retail sales, its development speed is impressive. In 2017, the retail sales of the South African e-commerce market reached US$2.647 billion, and it is expected that this number will double by 2023.
The potential consumer group is huge
South Africa has a population of nearly 57.88 million, of which 60% are Internet users. According to Statista, the number of Internet users is expected to reach 45.4 million by 2023, and by then more than 74% of South African residents will become potential users of the e-commerce market.
Consumption intensity is uniform
Statista’s report pointed out that the gender and income distribution of South African online shoppers is relatively balanced, with a male-to-female ratio of about 1:1, while low-income, middle-income and high-income groups account for 31.4%, 31.3% and 37.3% respectively. The main consumer group is concentrated in the 18-34 age group, and the amount of a single online purchase is usually between 250 and 1,000 South African rand (approximately 118 to 475 yuan). This shows that there is no need to consider market differences too much when conducting cross-border e-commerce business in the South African market. Popular products include food and personal care products, furniture and appliances, toys and DIY materials, electronic products, and fashion shoes, clothing and accessories.
Online payment promotes the development of e-commerce
As online retail grows, so does online payment technology. Since South African e-commerce started late, it can learn from global e-commerce experience from the beginning and focus on the construction of electronic payment systems. To this end, the South African banking industry established the Payments Association of South Africa (PASA). At the same time, the world’s leading payment platform PayPal also entered the market through FNB, South Africa’s largest bank. Currently, online transactions completed through cash on delivery in South Africa have dropped to 11% of the total transaction volume and continue to decline. It is expected that by 2023, the share of cash on delivery will decrease to 2%, and the rest will be completed by bank transfer, debit card and electronic wallet.
Government support
South African e-commerce has been able to rise rapidly in a short period of time. In addition to relying on the social development process, it also benefits from the strong support of the government. South Africa is one of the first African countries to implement a fixed broadband development plan to support the development of e-commerce. As early as 2013, the government issued a broadband support policy, planning to achieve broadband download speeds of 5MB/s and covering half of the population by 2016; by 2030, the goal is to increase the average download speed to 100MB/s, thus providing a solid foundation for the country’s electronics industry. Build a solid foundation for business.