E-commerce retailers have nearly doubled their share of the South African technical consumer goods market since 2015, according to market research company GfK South Africa.
A new GfK report released yesterday found that e-commerce retailers had grown their share of this market by 52% in 2017, accounting for 6.9% of total consumer spending by rand value for the year, indicating that over 44% of consumers had made a technical goods purchase online last year.
“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,” said GfK South Africa senior retail manager, Cherelle Laubscher. “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.”
She said that while traditional stores continued to dominate the market in the country, their sales growth rate was much slower than the digital players in the industry.
Survey respondents pointed out that better prices, attractive promotions and wide product selections were major reasons for buying online instead of at a physical store.
Data compiled by GfK also corroborated the perception by consumers that e-commerce prices were lower than in-store prices – with over two-thirds of the top 100 technical goods sellers in South Africa being an average 4.7% cheaper through digital stores than at physical retailers.
Client solutions manager Odette Jardim said that just under half of the survey respondents had made an online purchase after seeing a product in store, and around six in ten went to a physical store to buy a product after seeing it online.
“A consumer journey often straddles both physical and digital channels, meaning that the most successful retailers should have an omnichannel strategy,” she said.
The study highlighted delivery costs, information security fears and concerns about the ease of returning goods as reasons for consumer caution when shopping online.
Meanwhile, better delivery options, discounts and loyalty programmes are among the pull factors that entice consumers to shop online.
