This was one of the most significant findings of the final results of the Cloud in Africa 2023 study released today by World Wide Worx, with support from F5, Red Hat, Dell Technologies, Intel and VMware.

The study, based on interviews with 400 information technology decision makers in medium and large organisations across Africa, found that 63% of respondents across the continent had experienced an extremely positive impact on customer experience as a result of cloud computing. In South Africa and Kenya, that number jumped to 71%.

The two countries also shared a high impact on business growth: 51% of South African companies and 46% of those in Kenya reported strong business growth following migration to the cloud.

However, a gulf opened between the two countries when it came to the impact of cloud on innovation. In South Africa, 65% of respondents reported a high impact on innovation, while the proportion dropped to 36% in Kenya.

“Companies often move to the cloud seeking quick wins in the form of improved business efficiency or enhanced customer experience,” says Dion Harvey, Regional General Manager of Red Hat Sub Saharan Africa. “However, what we tend to see at Red Hat is that true value in the form of real innovation and impact on strategic goals is only realised once they have matured their thinking and approach to cloud.”

Asked what they saw as the biggest benefits of cloud computing in general, companies identified what World Wide Worx CEO Arthur Goldstuck, principal analyst on the research project, calls the cloud’s “golden quartet”: improved security, better customer experience, business efficiency and saleability.

However, the benefits were not equally distributed. Fewer than half of South African companies, 47%, reported security as a major benefit, compared to an average of 59%. The figure leaped to 78% in Ghana and 63% in Kenya. On the other hand, South Africa led the way in seeing scalability as a benefit, at 47%, compared to an average of 41%. Nigerian companies reflected the lowest response in this regard, at only 29%.

Alain Tshal, district manager of F5 for Sub-Saharan Africa, says that these results underline the extent to which the cloud is not a one-size-fits-all proposition in Africa.

“Every country is at a different level of maturity, and that has a major impact on both immediate benefits of migration and long-term benefits of use. South Africa has had the most extensive investment in hyperscale data centres over the past five years of any country in Africa, so it is no surprise to see that it has very different characteristics to most other markets.”

At the same time, where companies have accelerated their investment  in cloud computing, the impact is immediately apparent, says Goldstuck.

“The latest findings show that Kenya had the strongest growth in cloud computing in 2022, with a huge 84% of respondents reporting increased spend, compared to an average of 62%,” he says. “South Africa saw 55% of companies increasing their spend. That is partly a consequence of spending already having been high in previous years, compared to countries like Kenya.”

Companies from Malawi, Zambia and Botswana all reported a higher level of increased spend, while Nigeria and Ghana came in just below South Africa.

Expectations for 2023 flip around, however. While an overall average of 68% of companies expect to increase spending on cloud services this year, that jumps above 80% for Botswana and above 70% for South African and Nigeria.

In contrast, Kenya drops to the bottom of the list this year, with 51% of companies reporting they will increase their spend.

The comprehensive results of the Online Retail in South Africa 2023 study, released today by World Wide Worx with Mastercard, shows that online shopping shot up from 27% of adult South Africans in 2020 to 38% in 2022.

The study included analysis of the annual Target Group Index (TGI) survey conducted by Ask Afrika, which interviews 16,000 South Africans every six months to gather data on their consumption (products, brands and the media), purchasing behaviour, attitudes, motivations and beliefs. This survey provides the most detailed demographic breakdown of online shopping available in the country.

The growth in the proportion of the population’s shopping behaviours indicates a 40% increase in the total number of people shopping.

The initial findings from the study, released at the end of 2022, coincidentally showed close to 40% annual growth in total online retail spend over the past two years.

“The most revealing aspects of the new data lie in demographic differences between South Africans,” says World Wide Worx CEO Arthur Goldstuck, principal analyst on the research project. “The gender breakdown in particular shows that the traditional gender divide in online shopping, which was dominated by males in the early years still persists, with 41% of men and 36% of women shopping online.”

According to the report, a contributing factor to men dominating the online shopping space is due to them purchasing electronic goods more frequently, which traditionally is a male shopping domain. However, the fact that the biggest growth areas in online shopping in recent years have been in groceries and apparel categories, traditionally dominated by women shoppers, suggests there are other factors at work.

“These may well include elements like male control of household budgets and men being more likely to have a credit card in a household,” says Goldstuck. “It shows that outmoded societal norms die hard.”

The age breakdown of online shoppers in South Africa has seen a significant shift from 2020 figures. During the pandemic, online shopping had “normalised” across age groups, and at the time, an average of 27% to 30% penetration was seen in all age groups up to the age of 64. Only in the 65+ age group did we see a significant drop off (down to 19%).

In 2022, two significant shifts occurred. The first was that the pattern of shopping by age returned to a previously observed pattern, namely that online shopping peaked in the 25-34 age bracket, and then steadily dropped off with each successive age group. The second major shift observed during the past year, was in the significant drop in penetration of online shopping among the 65+ age group. This is the only age group that sees lower penetration than during the height of the pandemic.

“One conclusion that we can draw from the research is that online shopping is strongly correlated with age, but with the youngest age group constrained by lack of earning ability,” says Gabriel Swanepoel, country manager of Mastercard Southern Africa. “A second conclusion is that the oldest age group has a strong reticence towards online shopping, which is backed up by another finding that this bracket is the most likely to still prefer in-store shopping experiences.

“Now, more than ever, it is crucial for retailers to understand their consumers. Understand who they are, where they are, and how our country’s economics affect them. This will assist in understanding how and where to reach the targeted consumers, therefore creating a seamless consumer experience from online to in-store.”

While most age groups show a relatively high level of agreement with the statement that in-store shopping is preferable to online (24% to 30%), this figure increases dramatically to 41% in the over-64 category. No other demographic measure shows such a strong divergence in one segment regarding preference towards in-store experiences.

The metrics that showed the highest positive correlation with online shopping were:

• Education, rising from 20% for those with less than a matric qualification to 54% of those with tertiary education.
• Income, rising steadily from 22% for those earning less than R2,500 a month to 62% for those earning more than R50,000.

Says Goldstuck: “The results are in effect a blueprint for online retailers, showing on the one hand where they will reach their most lucrative customers, and on the other the segments they must target to grow online retail further in South Africa.”