E-commerce retailers’ share of SA technical consumer goods market up 52% in 2017

A research institute says e-commerce in South Africa is still in its infancy compared to European markets.

E-commerce retailers grew their share of the South African technical consumer goods market by 52 percent in 2017, accounting for 6.9 percent, a report from market research institute GfK showed on Monday.

“E-commerce in South Africa is still in its infancy compared to European markets, where a quarter of technical goods spending goes through digital channels,” GfK South Africa senior retail manager Cherelle Laubscher said.

“However, growth in South Africa is strong and shows no signs of declining as bargain-seekers flock online to buy technical consumer goods like smartphones, IT, consumer electronics, and major home appliances.”

The report says while traditional stores dominate the market, they are not growing the value of the sales they generate in technical goods as quickly as digital players. E-commerce retailers are seeing strong growth in smartphones, panel televisions, small domestic appliances, gaming consoles and laptops.

Survey respondents cited better prices, attractive promotions and wide product selections as major reasons for shopping online rather than at a traditional store. By contrast, the ability to see and feel goods motivated shoppers to go to physical stores.

GfK’s point of sale data indicated that more than two-thirds of the top 100 sellers among technical goods products in South Africa were cheaper through digital stores than at physical retailers. Across the top 100 products, online prices were an average of 4.7 percent cheaper.

The study highlighted delivery costs, information security fears, and concerns about the ease of returning goods as reasons consumers cite for caution when shopping online.

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