Information Technology: Online Shopping in South Africa

Online shoppers will reach 184.3 million in 2012 in the United States and this industry is predicted to grow. In South Africa, it seems that we lag far behind as just 0.5% of total sales occur online.

However, if you look at retail growth in SA it is currently around 6%, and online retail growth specifically is more in the region of 30%. This is evidence of the explosion that the South African market is experiencing at present. Many believe that the South African market has only begun to scratch the surface of the potential for e-commerce in SA.

Zando shook up the online retail sector when it was launched in South Africa in January by German clone-merchants Rocket Internet. Their model is the American success story Zappos, which changed the way shoes are sold on the Internet. 

Zando offers free delivery, extending the lesson learned previously by Cape Union Mart: the lower overheads of an online store – even if you also operate physical stores - means you can absorb delivery costs in your margin if you run an efficient operation.

It was, therefore, no surprise that last month, one of SA's largest clothing retailers, Mr. Price, unveiled its online store. The company has put its entire 18,000 clothing collections online. A recent survey by kalahari.com shows that tablet devices are joining smartphones in catapulting growth in online shopping. The survey of more than 4 000 connected South Africans revealed that 73.4 percent of tablet owners were already using their devices to shop online.

Edcon, which has the largest store card base in South Africa with 3.9 million cardholders, announced the revamp of its CNA website to enable customers to buy online with their Edgars or Jet cards and not only their credit cards.

Another big player Shoprite had put the idea of an online grocery store on ice until consumers showed more interest, taking a wait and see approach.

Despite the slow pace at which traditional retailers have entered this space, some consider online shopping to be the most exciting development at present, in particular for clothing.

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