Despite the onslaught of big-name competitors, pioneering homegrown platforms are still the go-to option for a broad cross-section of South African society.
With Amazon’s South African operations now up and running, the question on everybody’s lips is what the impact will be on homegrown online shopping platforms. The ecommerce giant has market capitalisation of more than a trillion US dollars, and there are fears it will crush local competitors.
What some may not realise, however, is that ecommerce sales still only account for around 5% of total retail sales. This is despite the Online Retail in South Africa 2024 report, prepared by World Wide Worx in partnership with Mastercard, Peach Payments and Ask Afrika, stating that the country’s online retail sector surged to R71 billion last year – a 29% increase from 2022.
Yet even with such phenomenal growth, a massive piece of the ecommerce pie remains. Some local brands even view Amazon’s arrival on these shores as positive.
‘We believe that while Amazon’s launch will bring in more competition, it also shows that South Africa is an attractive market with growth potential,’ said Craig Lubbe, Head of Marketplace at ecommerce ecosystem Bob Group.
‘We hope this interest will further help bring ecommerce into the mainstream for everyday people in the country. Growth for the industry is what we hope to see overall.’
He added that it should be remembered that South African shoppers are extremely value-conscious and have learnt to turn to platforms that best suit their pockets. And while it may have taken a while, they have also come to have faith in local payment solutions and shipping support channels.
It stands to reason that established local online sales platforms will need to find ways to differentiate themselves from what big-name competitors like Amazon can offer. Lubbe believes this won’t be a problem for the homegrown ecommerce industry.
In his foreword to the Online Retail in South Africa 2024 report, Gabriel Swanepoel, Mastercard country manager for Southern Africa, said the group recognises the transformative power of digital commerce and remains committed to enabling businesses of all sizes to thrive in this digital-first environment.
‘The empowerment of small businesses through digital commerce holds significant promise for South Africa’s economy, enabling these enterprises to tap into broader markets, improve their operational efficiency and contribute to economic growth and job creation,’ he wrote.
BOB GROUP
https://www.bob.co.za/
