Online business boom: e-commerce in SA to jump 150% by 2025
Rand Merchant Bank (RMB) estimates there are now around 5,000 businesses online in South Africa with a turnover of R100,000 or more.
And e-commerce is expected to be worth R225bn in SA by 2025, writes Aluwani Thenga in an article on the RMB website.
That's a 150% surge within five years.
While the move to online purchases was growing pre-Covid, it's lockdown restrictions that acted as "a massive accelerant" in pushing South Africans further in line with this global trend.
A recent Nielsen study on the impact of Covid-19 on fast-moving consumer goods (FMCG) and retail found the following:
"68% of South African consumers reduced their frequency of visiting physical supermarkets, while 37% of South African consumers increased their online shopping activity."
Bruce Whitfield interviews Aluwani Thenga, Executive Head of Merchant Services Growth at FirstRand Bank (First National Bank/Rand Merchant Bank).
The kind of shift that we've seen... is quite astonishing. I think what the pandemic and the lockdown that came through in March has acted as, it's been a bit of a catalyst or accelerant in that shift.Aluwani Thenga, Executive Head of Merchant Services Growth - FirstRand Bank
At FNB we've seen more and more of our customers going online, but this has been quite steep over the past six months.Aluwani Thenga, Executive Head of Merchant Services Growth - FirstRand Bank
I think we also saw that shift in many if our main retailers, mainly in the grocery field...Aluwani Thenga, Executive Head of Merchant Services Growth - FirstRand Bank
Thenga comments on teething problems and resulting consumer frustraton when lockdown was implemented and there was a sudden surge in demand.
That's testament to the fact that a very small fraction of the South African population was doing shopping online pre-Covid and then because the opportunity was there, the more that demand shifted from the physical to online... some of the businesses were caught unawares.Aluwani Thenga, Executive Head of Merchant Services Growth - FirstRand Bank
By our estimation I think by 2025 we'll see the market... shifting dramatically... because many of the business that would have otherwise thought of e-commerce as something that you would do over and above what you've done on your physical shelves - that has become front and centre for many of these retailers...Aluwani Thenga, Executive Head of Merchant Services Growth - FirstRand Bank
... the consumer trend and behaviour is such that people are looking for the convenience and security of being able to do anything online at any time as opposed to keeping to those shopping hours.Aluwani Thenga, Executive Head of Merchant Services Growth - FirstRand Bank
For more detail, take a listen:
This article first appeared on 702 : Online business boom: e-commerce in SA to jump 150% by 2025
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