This is largely due to the proliferation of smart devices and the expansion of internet connectivity which has created a viable environment for eCommerce to thrive in the country.

Additionally, the increasing integration of ecommerce platforms with various advanced technologies such as cloud computing, artificial intelligence and predictive analytics is also significantly driving the growth of the South African ecommerce market.

As a result, the country is becoming a significant player in the global eCommerce industry.

Indeed, the rise of eCommerce in South Africa holds immense opportunities for businesses looking to enter the market.

Further, the development presents useful learning points for other countries, such as Nigeria and Kenya, among others, all of which this SeerBit whitepaper exhaustively explores.

Factors Driving eCommerce Growth in South Africa

eCommerce growth in South Africa has been driven by several factors, including increased internet access, improved payment options and the convenience and efficiency of online shopping.

1. Increased internet access:

Mobile penetration among South African consumers is higher than ever, as indicated by research results from a Geopoll survey conducted in 2020 showing that 45 percent of the South African population browsed the internet on their smartphones for more than four hours a day.

The study also revealed that South Africa is one of the biggest adopters of mobile technology in sub-Saharan Africa, with higher rates of smartphone adoption than in most other countries in the region.

In terms of total numbers, there are 46.9 million smartphone subscriptions in South Africa, which accounts for users who have multiple phones. As of January 2024, there were 45.34 million active internet users in South Africa.

2. Convenience and efficiency of online shopping:

For South African consumers, convenience is key when it comes to choosing which online platforms to purchase from.

This reduced need to visit a physical store was also identified in a research paper published by Deloitte.

The research found that 26 percent of consumers in South Africa said they prefer to shop online because it is more convenient.

3. Improved payment options:

The integration of wallets, bank apps and shopping apps has made browsing through virtual shopping aisles easier than ever before.

Digital wallets have become an entry point for consumers to engage with financial services, thereby creating new opportunities to target the under-served banking population.

Also, as South Africans become more comfortable with the concept of online shopping, their appetite for eCommerce solutions continues to increase.

Overcoming Challenges Faced by eCommerce Businesses in South Africa

Despite South Africa’s strong eCommerce growth, the  WEF has noted  that eCommerce entrepreneurs are challenged by issues such as low consumer trust and e-skills, low internet penetration and affordability, uncompetitive delivery infrastructure, fragmented markets and barriers to cross-border e-payments.

1. Low Trust of Online Platforms

Many South Africans still do not trust online stores with their personal payment details. This stems from lack of knowledge about online payment systems and advanced security measures.

To overcome this mistrust, merchants should use a PCI DSS certified payment service provider (PSP) that meets high security standards and keeps customer information safe.

If customers understand how online fraud is prevented and the techniques that are used to prevent security breaches or fraud attempts, they are more likely to trust an eCommerce website with their payment information.

2. High Cost of Data and Internet Penetration

South Africans pay up to USD5.29 per gigabyte (GB) of data, a cost equivalent to nearly four hours work for people earning the minimum wage.

That compares with about USD1.53 per gigabyte in North Africa and USD2.47 in Western Europe, according to research by the Ichikowitz Family Foundation charity that highlights, among other topics, sub-Saharan Africa’s sky-high data costs.

The region has the world’s most expensive mobile data prices, according to the Worldwide Mobile Data Pricing 2021 report.

3. Issues with delivery infrastructure

Logistics is already a vital part of any retailer’s business plan, but its importance will continue to grow as the use of eCommerce for transactions increases. For stores to be efficient, they must be able to respond quickly and accurately to be able to deliver the correct products to customers on time.

Now more than ever an efficient supply chain is needed that gives a high level of service across all channels.

The Role of Technology in Shaping South Africa’s eCommerce Landscape

Technology has become an integral part of every aspect of life, and the retail industry in South Africa is no exception.

As consumer expectations continue to evolve, retailers are embracing innovative technologies to enhance the shopping experience and stay ahead of the competition.

Emerging technologies including contactless payments, virtual and augmented reality experiences, AI and mobile payments are all having a profound impact on eCommerce in the country.

Conclusion

The growth of South Africa’s ecommerce industry will likely surpass projections, thanks to the country’s growing appetite for online shopping.

The penetration of smartphones, access to data, increased number of platforms and products as well as evolving regulation supporting the industry are significant factors contributing positively to the growth of the industry.

There has never been a better time for businesses to enter the eCommerce market in South Africa.

This SeerBit whitepaper casts a deeper look at the trends, factors, future prospects and leading players transforming South Africa into the continent’s biggest eCommerce market.

Click HERE to access the full whitepaper.

In Nigeria and Sudan, the AYS 2022 shows it’s three quarters of the youth and in Angola and Malawi its two thirds.

If they do move, half of them will do it permanently. They don’t intend to return home. Their most popular destination will be South Africa, followed by Europe and the US.

There are many reasons for this; education, wanderlust, but the biggest is simply the quest for a better life that they believe is unavailable in their own countries.

The biggest concern that African youth have today is instability. 75% are concerned about the political volatility in the continent, rising to 91% and in Kenya and 89% in Mozambique, both of which are battling terrorist insurgencies.

At least half of Africa’s youth have had their lives impacted by terror, insurgency or conflict. 15% of them have either been approached to be recruited by a terrorist organisation or know someone who has been. In Mozambique, this figure rises to 25%.

Many have lost faith in their leaders. Only 40% of African youth believe their governments are doing enough to country the crisis in their countries. In Ethiopia, this drops to 20% and in Nigeria, 16%.

These are just some of the statistics from the second edition of the African Youth Survey, being released worldwide today.

Conceptualised and underwritten by the South African based Ichikowitz Family Foundation, the survey is a unique and ground-breaking research tool that tests the sentiment of the current cohort of Africans aged between 18 and 24 every two years.

Launched in 2019 with fieldwork in 14 countries, this was extended to 16 countries when researchers returned in 2021, this time to Angola, Congo Brazzaville, DRC, Ethiopia, Gabon, Ghana, Kenya, Malawi, Mozambique, Nigeria, Rwanda, South Africa, Sudan, Uganda, and Zambia. Researchers conducted 300 face-to-face interviews in each country, divided into three distinct geographical areas and further split into five distinct locations in each area.

Foundation chairman Ivor Ichikowitz says he is heartened by the responses in the second edition of this initiative: “The survey tells us much. It warns us, but it is also a source of great hope. In a continent that is wracked by violence, internal and external, there is a very clear sign that the next generation of people who will lead this continent is neither disempowered by nor ignorant of the hazards their countries and their continent face.

“On the contrary, these are highly motivated, highly informed and deeply committed citizens determined to ensure they have a chance at a life that was perhaps denied their parents.”