Join GlobalBizzNetwork and start your international business network today.
Internet retailing
More growth
Internet retailing continued to see growth in South Africa in 2013. The main growth driver was the increasing number of internet users. The disparity between incomes in South Africa had an impact on the performance of internet retailing. The high costs of bandwidth did not allow low-income and middle to low-income consumers to have access to the internet at home. As a result, only 11% of the total population had access to the internet; mainly consumers with middle to high incomes. Pre-paid contracts are more common in South Africa than fixed term contracts, which are usually two years. Most consumers access the internet at work.
Fragmented competition
The competitive landscape within internet retailing is fragmented in South Africa. The leading players are domestic, such as Kalahari.Net, a pure internet player. This company enjoys strong popularity thanks to offering a wide product range, from books to kitchen appliances. The company led internet retailing in 2013 with a value share of 6%. Grocery retailer Pick ’n’ Pay Retailers performed well in 2013, with a 6% value share. Both the leading internet retailers faced competition from Woolworths Holdings in 2013.
More sales through use of smartphones
Internet retailing is expected to register a value CAGR of 16% in South Africa over the forecast period at constant 2013 prices Growth drivers are expected to be better internet accessibility at home, and mobile phone access. However, payment methods such as credit card will continue to be restricted to high-income consumers, slowing down the possible performance of internet retailing. Nonetheless, mobile retailing should trigger value sales of overall internet retailing, thanks to the increasing number of smartphones over the forecast period.