The rise of South Africa's resilient ecommerce landscape
May 27, 2024 | By Gabriel Swanepoel
In our fast-evolving digital world, South Africa’s ecommerce landscape stands as a shining example of resilience and innovation. Faced with unique challenges, the country’s businesses and consumers have not only coped under pressure but have adapted in remarkable ways. This has helped ensure the seamless flow of goods and services in a rapidly growing digital economy.
South Africans’ response to disruptions such as load shedding has been nothing short of creative. Businesses across the country are turning to alternative energy sources and flexible operating hours to maintain productivity. This agility is more than a survival strategy; it’s a driving force that keeps the digital marketplace buzzing.
South Africa's ecommerce sector is poised for significant growth, fueled by innovation, improved infrastructure and a focus on customer experience. In 2022, the sector saw a remarkable 30% increase in online sales, reaching over R50 billion and outperforming the overall retail growth of just 1.7%. These numbers indicate that we are on the brink of a new era of digital commerce that offers vast opportunities for both merchants and consumers.
The payment landscape in South Africa is undergoing a significant transformation. With a new, tech-savvy generation of digital natives entering the marketplace, the country’s consumers are rapidly shifting towards online and mobile payments for their convenience and affordability, with Buy-Now-Pay-Later (BNPL) options gaining significant traction. Meanwhile, biometric payments and digital wallets, such as Apple Pay and Samsung Pay, are becoming the norm. This reflects a wider trend towards flexible, user-friendly financial services.
GenZ, is the biggest adopter of new payment methods, with 98% of them being tech-savvy smartphone owners. They are highly depended on their smartphones for online shopping and everyday transactions, which is no surprise, as there are over 22 million smartphone users in South Africa. According to a recent report by Meltwater, a consumer insights firm, that looks at the state of digital, indicates that South Africa is now ranked as the 3rd highest, globally for users, using their mobile devices to access the internet. This demonstrates South Africans are more likely to use their mobile devices for e-commerce usage as opposed to the web.
South African merchants are increasingly harnessing the power of technology to enhance customer interactions. They are leveraging omnichannel strategies and AI-driven personalized marketing to align with evolving preferences, thereby enhancing service delivery and meeting customer demand for flexibility in online transactions.
A key development bolstering the country’s ecommerce landscape is the introduction of infrastructures like the Equiano subsea internet cable. This improvement in internet access is set to revolutionize online shopping experiences, broadening the reach of digital payment solutions and bringing a larger consumer base into the digital marketplace.
Looking to the future, ongoing digitalization of supply chains will increasingly enable merchants to disintermediate resellers, allowing them to sell their products directly to their customers and paving the way for further growth of ecommerce. At Mastercard, we are committed to fostering
