South Africa is the second largest economy in Africa. Although South Africa’s e-commerce started late – in 2016, the country’s online retail sales accounted for only 1% of the country’s total retail sales, but the development speed is impressive.
(I) 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, it is expected that by 2023, the number of Internet users will reach 45.4 million, and by then more than 74% of South Africans will be potential users of the country’s e-commerce market.
(II) Even consumption
According to Statista data reports, the distribution of South Africa’s online shoppers in terms of gender and income group characteristics is relatively even, with a male-female ratio of about 1:1, and low-income people, middle-income people and high-income people each accounting for almost one-third (specifically, low-income people account for 31.4%, middle-income people account for 31.3%, and high-income people account for 37.3%). Most consumers are young people aged 18 to 34, and most consumers spend between 250 and 1,000 South African rand (about 118 to 475 yuan) each time they shop online. This means that cross-border e-commerce in the South African market does not need to pay too much attention to the differentiation of the 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.
(III) Online payment promotes the development of e-commerce
Online retail is developing, and online payment must keep up with the pace. As mentioned earlier, South African e-commerce started late, and it happened to be able to directly introduce the experience of global e-commerce. Therefore, the South African e-commerce market has started to develop electronic payments since its infancy. South African banks have also established a special South African Payment Association (PASA) for this purpose. These measures have promoted the development of South African e-commerce. In 2017, the total amount of online purchases completed by cash on delivery in South Africa has dropped to only 11% of the total amount of online orders, and this number is still decreasing year by year. It is estimated that by 2023, only 2% of the total online purchases will be paid by cash on delivery, and the rest of the orders will be paid by bank transfer, debit card and e-wallet.
(IV) Government Support
The fact that South Africa’s e-commerce, which started later, has developed into one of the best e-commerce markets in Africa in just a few years is inseparable from the supportive attitude of the local government, in addition to relying on the necessary development process of society. South Africa is one of the first African countries to launch a fixed broadband development plan 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 and be popularized to half of the population; by 2030, the average broadband download speed will reach 100MB/S, which will fundamentally safeguard the development of local e-commerce.