Insights into the growth of South African eCommerce with Payment methods, target audiences, marketing, social media, economy and logistics all profiled
South Africa is home to 54.96 million people, with a total GDP of $312.8 billion USD. Continued economic growth in South Africa has resulted in it now being classed as an Upper Middle Income economy. Although GDP per capita is low at 5,691 USD, international retailers should focus on the rising middle class that reside predominantly in urbanized areas. 13.7% of the population is classed as middle class, with almost 15% of the population classed as middle class and above.
Digital User Insights
There are currently 17.4 million eCommerce users in South Africa, with 5.8 million additional users set to shop online by 2020. 46.1% of the South African population shops online, with this expected to reach 60% by 2020.
In 2016, males between the ages of 16-24 shop online more than their female counterparts, accounting for 2.5 million of South Africa’s online shoppers. Older males (55+) also shop online more than their female counterparts. In every other age group female shoppers outnumber their male counterparts marginally.
Projections for 2020, show growth of shoppers in each age group and expect the ratio of female to male shoppers to remain consistent until 2020. A slight shift is anticipated in the 45-54 year old age group, where men will account for a greater market share than female shoppers.
Total eCommerce revenue across all product categories is 3.2 billion USD, expected to reach 5.8 billion by 2020. Electronics is currently the leading product category, accounting for more than double the amount of revenue produced by any other category, at 609 million USD.
By 2020, electronics is expected to only marginally lead the charge. Valued at 1.6 billion USD, it will only generate slightly more than fashion (1.5 billion USD) and furniture & appliances (1.3 billion USD).
South Africa is ranked 20th in the world by the World Bank for logistics, showing marked improvement and investment in infrastructure to grow from a 34th place ranking in 2014. The overall population is becoming steadily more urbanized, with 65% of South Africans currently residing in the country’s biggest cities.
Preferred Online Payments
50% of online payments are made via credit/debit card, with the usage of card type split 50:50. Bank transfers are the most popular alternative payment type, accounting for 14% of online payments in South Africa. Voucher based payment systems like Ukash, and payment wallets like Paypal are growing in popularity.
Where does South Africa buy from?
China supplies South Africa with 16.1 billion USD in imports. Other key import partners are Germany (8.5 billion USD), Saudi Arabia (7.13 billion USD), US (6.96 billion USD) and India (5.48 billion USD).
Internet and Device Usage
Internet penetration in South Africa is currently at 63%, and should reach 77.2% by 2020. Smartphone penetration is 58.9% and is projected to grow to 74.3% by 2020.
17.04 million online shoppers research products on desktop, with 12.66 million making their final purchase through this device. 9.35 million online shoppers research products on mobile, with 6.05 million making their final purchase through this device.
Marketing spend in South Africa has grown in recent years, with television accounting for almost 1.5 billion USD of total marketing spend. Digital has seen a steady increase in market spend, with radio growing steeply to reach 500 million USD market spend.
South Africa’s social media usage continues to shift, with users spread across a number of different platforms. Whatsapp and Facebook are the most commonly used networks, while GooglePlus, LinkedIn, Pinterest, Instagram and Twitter all show that at least 10% of the population logs on.
For more market insights, check out the eShopWorld series of blogs covering a range of emerging eCommerce markets.
*Insights derived from eShopWorld data, Statista, WorldBank, OECD and other industry sources.