South Africa is Africa’s second largest economy. Although 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–the development speed is impressive. In 2017, the South African e-commerce market had retail sales of $2.647 billion, and this number is expected to double by 2023.
(1) Huge potential consumer group
South Africa has a population of nearly 57.88 million, of which Internet users account for 60% of the total population. According to Statista estimates, based on the growth rate in recent years, the number of Internet users is expected to reach 45.4 million households by 2023, and by then more than 74% of South African residents will be potential users of the country’s e-commerce market.
(2) Uniform consumption intensity
According to the Statista data report, South African online shoppers are fairly evenly distributed in terms of gender and income group characteristics, with the ratio of men to women being about 1: 1. Low-income people, middle-income people and high-income people each account for almost one-third (the specific proportion is low-income people account for 31.4%, middle-income people account for 31.3%, and high-income people account for 37.3%). Consumers are mostly young people aged 18 to 34, and most consumers spend between 250 and 1,000 South African rand (approximately 118 and 475 yuan) each time they shop online. This means that cross-border e-commerce merchants in the South African market do not need to pay too much attention to the differentiation of this market when formulating sales plans. Food and personal care, furniture and home appliances, toys and DIY supplies, electronics and media, and fashion shoes, clothing and accessories are all popular categories in South Africa
(3) Online payment promotes the development of e-commerce
Online retail is developing, and online payment must keep pace. As mentioned earlier, South Africa’s e-commerce started relatively late, and it happened to be able to directly introduce the experience of global e-commerce. Therefore, the South African e-commerce market started to develop electronic payments from its infancy. South African banks have also established a special Payments Association of South Africa (PASA) for this purpose. PayPal, the world-renowned American third-party online payment service provider, has also entered the South African e-commerce field through FNB, South Africa’s largest bank. These measures have played a role in promoting the development of e-commerce in South Africa. In 2017, the total amount of online purchases completed through cash on delivery in South Africa has dropped to only 11% of all online orders, and this number continues to decrease year by year. It is expected that by 2023, only 2% of total online purchases will be paid through cash on delivery, with the rest of the orders paid for entirely through bank transfers, debit cards and e-wallets.
(4) Government support
South African e-commerce, which started relatively late, can develop into one of the top e-commerce markets in Africa in just a few years. In addition to relying on social necessities In addition to the development process, it is also inseparable from the supportive attitude of the local government. South Africa is one of the first African countries to launch a fixed broadband development program to support e-commerce initiatives. The government announced its broadband support policy in 2013, which requires that by 2016, South Africa’s broadband download speed will reach 5MB/s, covering half of the population; by 2030, the average broadband download speed will reach 100 MB/s, which fundamentally provides Guarantee the development of local e-commerce.