South Africa’s online shopping on the rise

26th September 2011 By: In On Africa IOA

South Africans are progressively becoming more familiar and feeling more positive towards online shopping. The higher frequency and larger amounts of virtual transactions in South Africa’s cyberspace, even when the economy has not been at its best, have been facilitated by a variety of factors that include the expansion of local Internet usage, the proliferation of cell/smart phones, an enabling legal framework and different enhancements in the Internet-based payment methods and in the web-based commercial experience. In this context, it has not been difficult for South African consumers to increasingly trust, understand and engage in e-commerce activities.

In general, South Africa’s e-commerce activity is regulated by the Electronic Communications and Transactions (ECT) Act of 2002 and by the Consumer Protection Act (CPA) of 2010. These norms have legalized and facilitated computer-based communications, transactions and activities in the country, while also promoting a fair, secure and protected environment for consumers and suppliers to interact and trade.(2) Evidently, the existence of and compliance with clear and rigorous rules have provided online agents with much needed assurance and security to operate electronically and to perform all types of Internet transactions.

Furthermore, the increasing figures of Internet penetration in South Africa have also contributed to the development of e-commerce activities. South African research company World Wide Worx reported a 15% increase in local accessibility to the Internet throughout 2009 to reach 5.3mn users by the end of that year. They calculated a similar growth rate for the following year, resulting in close to 6mn Internet users by the end of 2010.(3) The report also estimated the country’s online shopping amount to reach ZAR 2bn by the end of the year 2010.(4)

The virtual mall: what are the South Africans buying online?

In terms of trends, a survey conducted by MasterCard Worldwide (5) between September and October of 2010 in which 8,500 consumers participated revealed that South Africans accessing the Internet, do so mostly to check their email (95%), to browse information/study material (74%), to control their bank balance (73%) and to browse for leisure (73%). 51% of South Africans who have access to the Internet are shopping online and 75% of those confirmed having done so in the previous three months.

The MasterCard study also showed that 89% of South Africa’s online shoppers are satisfied with their virtual shopping experience, and that 73% of respondents intended, at the time, to make computer-based purchases over the next six months. South Africans favoring online shopping find the experience more convenient (online shops are always open, there is no need to deal with sales people or to drive to the store, etc…), user-friendly and easier than physically going to the shop or ordering something using a catalogue or through a call center. Also 54% of South Africa’s online shoppers tend to conduct research before their Internet-based purchases either by surfing the web or by compiling references from friends and family. Impulse online shopping decreased from 22% to 8% between 2009 and 2010.

MasterCard’s report also evidenced the South Africans’ increasing preference for using broadband access technologies, with ADSL and 3G/HSDPA usage rising over the 2009-2010 period, and dial-up connections decreasing substantially during the same timeframe. In that same line, the number of South Africans that use their mobile phones to connect to the Internet grew significantly from 13% in 2009 to 39% in 2010, which is the highest percentage in the Asia Pacific/Middle East/Africa region. The closest scores belong to Singapore with 33%, India with 25% and Malaysia, Thailand and UAE with 20%, each. The increasing competition in the country’s mobile telephony sector, the deployment of smart phones by companies and the upgrade of networks and associated services have importantly pushed up local cellular phone penetration, making it an additional and very important source of growth for online shopping. The MasterCard survey found that 11% of South Africa’s online shopping community made purchases using their cell phones and that 13% had the intention of doing so in the next six months. Despite these relatively small figures, another recent survey by the local e-commerce firm revealed encouraging results regarding the growth potential of mobile shopping in South Africa; a country where the ratio of cell phone penetration versus fixed Internet users stands at 5:2, and where 57% of local individuals exclusively access the Internet through their mobile phones. As with regards to South African’s mobi habits, the study found out that from all the respondents; 50% connects to the mobile Internet on a daily basis, 89% considers the mobile web as secure as the fixed Internet line, 37% have or will spend over ZAR 1,000 on mobi shopping, and 26% have already made online purchases using their cell phones.(6)

The survey performed by MasterCard also established that the preferred products of South Africa’s online shoppers are CDs and DVDs, at the top of the list with 50%, followed by books and art, with 45%. Then come airline tickets, shows/movie tickets, and home and electric appliances. A previous survey by Synovate ranked music and movie downloads at the top of South Africa’s online shopping list, as these products are easy to access and provide instant gratification.(7)

Regarding payment methods used for online shopping, MasterCard’s report revealed that South Africans prefer credit cards (48%) and, to a lesser extent, debit cards (29%). Other online payment options include the internationally known PayPal system that allows for convenient and quick money transfers/payments in a secure environment (without revealing credit card numbers or banking accounts details), and other local alternatives like Netcash (who process credit cards and debit orders) and Ukash (who operate through physical vouchers purchased at supermarkets and convenience stores).(8)

According to the MasterCard’s study, many South Africans have not yet embarked in online purchases, because they still prefer to buy in-store to directly see and asses the quality and characteristics of the product (55%), they do not trust online safety (51%, versus 63% in 2009) or they simply do not own a credit card (44%). Many South Africans enjoy the direct and traditional shopping experience offered by malls and commercial centers, and tend to plan their weekend leisure activities around the family trip to the shopping mall. These individuals do not seem attracted by virtual shopping and, usually, downgrade the benefits of buying online. Besides, the number of participants that stated not having shopped online due to “additional administration and delivery charges” jumped from 24% in 2009 to 41% in 2010, while other individuals mentioned not having found anything of their interest in online stores. Additionally, many local people are not familiar with online shopping processes or just see it as something complicated. South Africans that do not shop online indicated that online shops can improve their offerings and services by continuing to enhance payment security, reducing/eliminating additional service charges and by making more user-friendly websites.

Research generated by World Wire Worx disclose that there are more than 800 retail websites in South Africa’s cyberspace, with some of the most popular ones being: Mweb Shopping Zone and Digital Mall in the online mall area; Pick ‘n Pay and Woolworths in the supermarket sector;, Exclusive Books and Loot in the sale of music/DVDs and books; and Digital Planet and NGR Computers Online Webstore in the area of electronic appliances and gadgets; among others.(9) Most of these websites require shoppers to create a profile (login and password) and offer a wide array of products in a friendly and informative fashion. They are intended to provide consumers with an easy, secure and convenient shopping experience, trying to minimize the downside of not having seller, buyer and product in the same physical place.

What can we expect?

The advances in South Africa’s online shopping are far from over. Despite the high poverty levels of an important section of the population, many of the 43mn South Africans that currently do not have Internet connection should be able to profit from the web experience in the coming years. The popularization of e-commerce will require different types of retail stores and well known supermarket chains to introduce and sell their products through the Internet, ensuring that the offering is wide, convenient and price competitive. Online payment security should continue to improve to give consumers extra assurance on their web transactions and to attract new online shoppers. Progressively, South Africans should be able to understand that paying online is not necessarily riskier than offline (10) and to benefit from an additional shopping alternative.

According to Stats SA, physical retail sales in South Africa amounted ZAR 561bn in 2010, with only 0.4% coming from online shopping activity. Nevertheless, physical retail sales registered a 7% growth against a 30% rise for online sales in that year, signaling not only a pronounced growing trend of e-commerce transactions, but also the emergence of an important/parallel retail sale option among local consumers. In that line, a study by World Wide Worx indicates that online retailers are quite optimistic and expect a 40% rise in sales in 2011.(11) The developing world-recognized trend of using cell phones, as vehicles to go online and conduct commercial operations should particularly contribute to the expected boost in virtual sales. Still, enhancements in the phones’ functionalities, in the presentation of information/fitting in the small screen, and easiness of use will be required to facilitate the translation of more mobile phones in actual internet usage and online shopping. The potential of growth is huge; as reflected by a report from Forrester Research that revels that only 3% of overall site traffic corresponds to developing nations and that 2% of total online revenues come from emerging markets.(12) South African retailers should acknowledge this opportunity and try to benefit from Internet-based commerce activities, integrating them in their strategic operations while also taking into account their clients’ demands and preferences.


(1) Contact Micaela Florez-Arraoz through Consultancy Africa Intelligence’s Industry and Business Unit (
(2) Ndobela, T., ‘The State of E-Commerce in South Africa’, 2011,
(3) ‘SA’s Online Shopping Gets Thumbs Up’, MyBroadband Mobile,
(4) ‘South African Consumers Reveal What Makes Them “Click” Online’, Practical Marketing,
(5) All references and information from the MasterCard survey have been taken from: ‘SA’s Online Shopping Gets Thumbs Up’, MyBroadband Mobile,
(6) ‘SA Mobile Shopping Set to Soar’, BiztechAfrica,
(7) Ibid.
(8) Bahlmann, G. (2011), Payment Processing South Africa,
(9) ‘Shopping Online in South Africa’, South,
(10) ‘Online Shopping: South Africa Just Got a Bit Safer’, Cyberstorm Online Shopping ,
(11) ‘South Africans Buying More Online’, South,
(12) Ibid.

Written by Micaela Flores-Araoz (1)