South Africa

E-commerce in South Africa

South Africa, with its 56.8 million inhabitants, is the second most developed economic area of the African continent. Until 2020, 5.8 more South African are expected to adopt online shopping, for a total 60% of the population being online shoppers. Accordingly, the compounded annual growth rate should be of 10% until 2022. In 2017, South Africans spent 38$ US per capita online and 3,698$ US per capita at brick-and-mortar shops.

Visa most popular means of payment

Credit cards, especially visas with nearly half of all card in circulation, are the leading payment method in South Africa. Other alternative payment methods are the e-wallet giant PayPal, Ukash, M-Pesa, Cell Pay Point, Zapper and FlickPay. Mobile wallets were used to settle 17% of e-commerce and 5% of POS transactions in 2017. At point of sale, cash is still the most popular payment method, being used to pay for over half (57%) of transactions. Popular payment providers in South Africa include iVeri, MyGate, Pay4It, PayFast, PayU, Peach Payments, Setcom and SID. In the next five years, alternative payment methods are expected to be used for 40% of all online transactions.

Cross-border commerce

South African consumers are mostly buying on domestic websites. International purchases are mostly made to the US and Europe. The third most clicked website is the US version of e-commerce giant Amazon. Export are mainly shipped to China, the USA, India and the UK. The top import countries of South Africa are China, Germany, the USA, Nigeria and India.

Perspectives for the future

The popularity of e-commerce is still relatively low in South Africa. This can be partially explained by a lack of trust. While 97% of South Africans believe their payment information are safe when shopping in person, about one-fifth of the population believe online shopping put their information at risk. In a country where one-third of all consumers reported being victims of credit card fraud in the last five years, the growth of e-commerce must deal with security threats as well as security perception. Meanwhile, retailers are taking advantage of online channels to drive their growth.

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