Table of Contents
- Why is eCommerce so big
- The industries
- The big names
- Large competitors
- Major buying holidays – Black Friday, Cyber Monday
eCommerce in South Africa is an ever-growing market with a strong existing presence. South Africa earns 5 billion USD in revenue from this sector alone. The country has a thriving online culture that is highly interested in online purchases. The eCommerce market in South Africa is diverse in its offerings. The top 3 websites that bring in the most revenue do not account for most of the revenue in eCommerce. This indicates that there are other sites that generate millions but are not among the top 3. For businesses that want to enter the market, enlisting your products on an eCommerce platform is a fantastic opportunity to extend its reach to new potential customers.
Why is eCommerce so popular?
South Africa has had the structure needed to operate an eCommerce industry for several years. The supporting industries of the internet, telecommunications, and logistics such as couriers, and storage were key in allowing an industry like this to survive. South Africa established the infrastructure and in the more recent years up to the last decade, the business models came in and grew with the infrastructure. This set up the industry to steadily grow in different sectors. The growth is evident in the sectors of fashion, travel fast food to automotive. Each has users in large numbers. The infrastructure allowed this. Another aspect that boosted the appeal of eCommerce is Covid-19. The pandemic led to more people at home and looking for alternatives to all things including shopping. This boosted the number of users.
Fashion – Mr Price, Superbalist
Automotive – We Buy Cars
Food – Woolworths, checkers
Fast food – Mr D
Travel - Booking.com
A growing number of industries have been entering eCommerce because it is a great way to reach more people. The impact of the Covid-19 pandemic has left many businesses in a hard place which requires adaption to the volatile nature of online sales trends and patterns. It is in part, why so many companies that have had existing stores began to offer eCommerce options. Gaining more market share is a major factor in why companies would launch eCommerce platforms. Loyalty programs growing in use is another aspect of businesses attempting to maintain their customer loyalty.
The big names
The bigger online retailers are along the categories of fashion, automotive, food, fast food, and travel. In South Africa, telecommunications have been a long industry, as a result, its growth is less than in countries like Kenya.
Fashion has seen a boom in online purchases through stores like Superbalist and Mr Price. Mr Price – Mr. Price is a long-standing retailer with location stores across the country. It makes it efficient for the source of a number of products. This also allows them to offer multiple delivery methods such as collection at locations or delivery to an address. Superbalist offers fashion-related items and has been praised for its style, range of options, and comparative affordability. These are the key factors that have boosted its success. The marketing of Superbalist has connected well with its audience by using social media, on-site, and influencer marketing to reach its customers.
In the automotive sector, we have We Buy Cars car sales clearly indicates that it has more potential is a site that sells cars in multiple ways including auctions. We buy cars has grown to build multiple locations where customers can visit to purchase cars that aren’t on auction yet. The growth of online sales of cars clearly Indicates that there is more potential in it.
Food has multiple companies trying to retain the most customers. Woolworths and Checkers have launched apps that are aimed at adding convenience to their customers. Woolworths Dash and Checkers Sisty60 aim to address the connivance aspect for their customer. These companies have multiple locations nationwide, they can do collection or delivery to an address.
Fast food in South Africa is going into eCommerce as more and more restaurants and fast food develops develop delivery websites and apps. McDonalds has their own app. McDonalds offers a delivery service which goes hand in hand with eCommerce. Uber eats is a food delivery app that allows restaurants to list their menus and customers to select what they would like and have it delivered to them.
Travel has been made more online through sites like booking.com and Airbnb. These are not strictly eCommerce sites because they do not deliver a product but rather provide the service of finding you accommodation for your travels.
B2C eCommerce platform
Takealot is the largest contributor to the total revenue earned in South African eCommerce. It is a B2C platform that has gained and maintained its popularity for various consumer-related products. Takealot allows businesses to list their product. Takealot then stores several products in their warehouses in Johannesburg and Cape Town. Takealot has been dominating in its control of B2C products. The entry of Amazon is expected to disrupt this, but their predictions can be diminished by the idea of American companies failing to adapt their models for the markets they enter
Major buying holiday
Black Friday and Cyber Money are likely the most prominent eCommerce sales dates. With stores offering weekend to full-week deals. Falling in November, these made consumers less comfortable spending. Over the recent years, many eCommerce sites have been exposed for raising their price prior to these dates and then selling the previous retail price as the black Friday deal. This has made consumers less comfortable spending but there is still a large market that contributes to these dates.
ECommerce in South Africa has a continuously growing market. The developments in what's available, what's needed, and wanted to continue to prove that there is more potential. Under that understanding, Enterprise Africa aimed to assist international brands to enter South Africa effectively. Enterprise Africa is a B2B platform that brings business interest in gaining online market share to the forefront of what’s needed.