Ecommerce and South Africa

Ecommerce, the buying or selling of goods and services over the Internet, is changing the way that we shop.

Even in South Africa on an increasing basis, consumers turn to the internet to purchase products ranging from travel packages to clothing.

Ecommerce offers buyers maximum convenience through being able to visit websites of multiple vendors round the clock a day to compare prices and make purchases, without having to leave their homes or offices from around the globe. Ecommerce's advantages aren't just for consumers; retailers also find there are advantages to selling online. Customers can shop in their own time, and an online store doesn't require live sales people.

“For sellers, ecommerce also offers a way to cut costs and expand their markets. They do not need to build, staff, or maintain a physical store or print and distribute mail order catalogs. With automated order tracking and billing systems cut additional labor costs, and if the product or service can be downloaded then e-commerce firms have no distribution costs involved" William King (2006).

What does this mean for South African websites?
South Africa has a wide range of ecommerce sites and with the launch of *PayPal in South Africa and more internet penetration into the market, we are likely to see a rise in ecommerce sites in the near future.

There are four factors that will affect the rise in ecommerce in South Africa:

Launch of PayPal in South Africa: PayPal enables South Africans to sell to PayPal’s global customer base of more than 81 million active accounts in 190 markets around the world and move the proceeds to their FNB accounts. In a nutshell, this service will allow South African based online stores to trade in their currency at ease.
Rise in online retail sales: According to AfricaOnline, “online retail sales surpassed the R1 billion mark for the first time (in 2008), according to internet researcher Arthur Goldstuck, who predicted that it will grow a further 20%” in 2009.
Internet penetration in South Africa: “Internet usage in South Africa has exceeded the 5 million milestone or 10% penetration rate in the country” says Goldstuck (2010).
Internet Speed: “The arrival of Neotel’s Seacom submarine fibre-optic cable will increase South African broadband access a staggering 40 times, making internet access cheaper and internet shopping more comfortable”, AfricaOnline (2009).

All of the factors above will play a significant role in getting people exposed to online shopping. The one question that is left unanswered is how quickly the general population will accept the increase and popularity of online shopping and part with giving out their credit card details. How soon will consumers trust online shopping and the security?

*Paypal is an international company offering an online payment system. It is a system used on the Internet which allows you to buy directly from a website and transfer money between yourself and someone else via email or between merchant (South Africa is the 190th country to get paypal accounts).

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