E-commerce in SA has grown from 1% to nearly 10% of retail sales in just five years, the E-commerce Forum of SA (EFSA) has reported.
A study by the Mapungubwe Institute for Strategic Reflection (Mistra) in partnership with Takealot, shows SA’s ecommerce market is projected to grow to R130bn by 2025, representing nearly 10% of total retail sales.
According to Alastair Tempest, CEO of EFSA, the growth in local e-commerce is “proof that we’re at a pivotal inflection point”.
“If business, government and civil society seize this moment, we can unlock an export opportunity in excess of R1-trillion, which will widen access for every entrepreneur and anchor SA at the heart of Africa’s digital economy.”
While the local opportunity for local e-commerce players is large and obvious, the report points to an even bigger pie beyond SA’s borders.
As a member of the African Continental Free Trade Area (AfCFTA), SA has “a strategic opportunity to align e-commerce policies across Africa and expand regional trade,” said the report.
“Connecting MSMEs [micro, small and medium enterprises] to continental markets would drive growth and enhance competitiveness.”
The report also encourages a look inward, highlighting a R900bn market that “lies untapped” in SA’s townships.
EFSA says focused investment in township e-commerce can unlock inclusive growth, spur local industrialisation and boost national competitiveness.
Takealot group CEO Frederik Zietsman told Business Day that there was a risk of alienating rural and township customers if digitalisation did not spread equally, which would hamper e-commerce growth.
He said the report affirmed Takealot’s belief that a large segment of the population was inconvenienced by traditional retail or unreliable e-commerce.
“We are fundamentally of the view that there are a lot of people today significantly inconvenienced by traditional retail channels … it imposes an inflationary component onto their lives; it makes life inconvenient for them.”
To take advantage of this opportunity, Takealot has launched five township franchises to fulfil orders and handle last-mile delivery, creating a “social licence to operate” and improving delivery times.
The company also has a personal shopper programme, which allows micro-enterprises to shop on behalf of their community. This currently has about 15,000 registered shoppers.
For Zietsman, the findings of the report “signal to us that we were right, and we need to double down on that.”
A major concern highlighted is the slow pace of adoption of digital commerce and the digital economy in the business-to-business (B2B) sector when compared to the business-to-consumer (B2C) sector.
Tempest defined B2B e-commerce in the context of taking the existing sales of a company, such as one selling mining equipment, and moving that process online.
He suggests it is the process of businesses being able to buy from a mining company in the same way they would buy from a consumer platform such as Takealot, with the same level of marketing and efficiency.
This would see a move away from the traditional “comfort zone” of phone calls and established relationships towards a system where everything is done online.
