Online retail creates express freight opportunities

South Africa’s online
retail sales are
expected to reach
one percent of all
retail sales for the first
time since the rise of local
e-commerce – presenting a
potential growth opportunity
for the courier sector, ICT
analysts have said.
World Wide Worx’s ‘Online
Retail in South Africa 2016'
report released recently
indicated that online sales
would hit the
one percent
mark during
2016.
“While
one percent
represents
a very small
proportion of
overall retail,
it is also a
psychological
barrier for
investment
in e-commerce initiatives by
physical retailers,” Arthur
Goldstuck, principal analyst
and managing director of
World Wide Worx said.
Online retail has grown
at a rate above 20% since
the turn of the century,
according to the report, and
while online sales grew 26%,
taking online retail to the
R7.5-billion
mark in 2015,
growth was
expected to
slow to 20%
this year. But
in rand terms
it would hit
above R9
billion.
“The
number also
masks the
extent to
which a number of major
retailers have exceeded the
one percent online mark
by a substantial margin,
compared to the vast
majority that are not yet close
to this mark, if they have an
e-commerce presence at all.”
Goldstuck said online
retail in South Africa was
often regarded as being
undeveloped, behind the
curve and lagging behind
Western markets. He said
much of the growth was due
to an increase in the number
of consumers prepared to
transact online, rather than
retailers effectively working
to grow online spend.
However, he said online
retail sales were forecast
to double over the next five
years.
Anesu Charamba,
ICT team leader at Frost
& Sullivan Africa, said
the online retail space
was experiencing huge
growth and could create
opportunities for the courier
sector.
“The online retail space is
growing at a rapid rate - in
part due to the flexibility,
speed and transparency
afforded to customers. The
promises online retailers
make to their customers
regarding service delivery link
directly to the courier services
they use, particularly if they
do not have the logistics
capability in-house. There is a
correlation in growth between
the two sectors,” he said.
“Whether the courier
sector will grow at the
same rate is debatable,
although there will be
a closer relationship
between the two sectors.
What’s important is
understanding that
growth in online
retail will act as a catalyst for
growth to the courier sector,
and their increased capability
will increase the capacity of
online retailers,” he said.
“It’s a highly symbiotic
relationship that will lead to
future business
opportunities
in the
courier
sector.”
INSERT & CAPTION
Online retail sales are
forecast to double
over the next five
years.
– Arthur Goldstuck