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South Africa is 'slow' to adopt online shopping

By , IT in government editor
South Africa , 07 Aug 2012

South Africa is 'slow' to adopt online shopping

A top expert says it could take years before most South Africans adopt a culture of online shopping, despite some of the country’s top retailers having launched e-commerce websites of late.

Last week, one of SA’s largest clothing retailers, Johannesburg Stock Exchange (JSE) listed Mr Price, unveiled its online store. The company has put its entire 18,000 clothing collection online at a time after Stats SA said that the country’s retail market sluggishly grew by just 1% year-on-year for the month of April 2012.

E-commerce executive for Mr Price, Donovan Baney, said that South African consumers are more likely to take up online shopping than ever before, as increased bandwidth at cheaper prices is becoming a reality in the country, owing to undersea fibre-optic cables such as SEACOM reaching SA’s shores.

But he said that SA lags far behind the rest of the world, as just 0.5% of total retail sales in the country occur online. In developed markets such as the UK and the US, this figure is between 7-10%.

Spiwe Chireka, a manager for International Data Corporation’s (IDC) telecoms programme in Africa, adds that SA’s take up of internet shopping is set to remain low in years to come, even as more e-commerce options come online.

“One of the fundamental things is that online shopping is a cultural shift; people are so used to walking into a shop and buying things off the shelf.

“It’s the touch and feel of the goods and that’s what people want. And any service provider would have to make it part and parcel of their marketing promotional work,” she said.

Chireka further says that SA suffers from low connectivity, which is severely hampering online shopping from taking off.

“Broadband penetration among the shopping population is less than 15%; so, unfortunately it’s too low to allow people access to e-retailing,” she adds.

She goes on to say that other factors slowing down the uptake of online shopping in South Africa include retailers in the country that don’t understand how to maximise e-commerce.

“Everything available at the store should also be available online; consumers need to find items everywhere and anywhere,” explains Chireka.

“Currently local retailers do not have it like that, they are still very much holding onto the traditional models of doing work, whereas international websites are comprehensive, you will find every single product on that website, and that’s an incentive for people to buy online,” she said.

Chireka says that for SA consumers to be more receptive to e-shopping, retailers in the country need to take a page from international brands who have gone the online route and perfected it.

She also says that SA retailers need to look to banks in the country that have managed to achieve a higher-than-expected adoption rate of internet banking.

A study conducted by World Wide Worx and backed by First National Bank earlier this year said that a total of 37% of South Africans in urban and rural areas aged 16 and above use cell phone banking.

“Five years ago I didn’t think I needed online banking but, guess what, now I need it.

“The banks did the type of contact that I call supply generated demand – emphasising you need a service because of how great it is and in that instance you actually start to use it,” she concludes.

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