E-commerce has now become a norm in South Africa as more consumers opt to shop from the comfort of their home without having to worry about security and transport costs.
South Africa’s largest online retail store, Takealot has made a significant impact on the country’s e-commerce industry since its inception in 2011, which has paved the way for other online retail stores to launch and for physical retailers to branch out into online sales.
E-commerce tends to offer cheaper prices compared to brick-and-mortar stores due to lower overhead costs; this then aids in reducing the overall pricing which in turn attracts consumers.
Shift from brick-and-mortar stores to e-commerce
For South Africa, the COVID-19 pandemic caused many consumers to migrate from going to brick-and-mortar stores to shopping online.
At the start of 2025, South Africa’s Internet penetration rate stood at 78.9%, according to DataReportal research, signifying 50.8 million Internet users.
Convenience, privacy, control, accessibility and availability of information have been found to be factors that contribute to consumer motivation to engage in e-commerce.
In an interview with Connecting Africa, Nomvelo Moima, a junior economist at South Africa’s Bureau for Economic Research said increased uptake of online vs. in-store shopping is one of the many trends that has emerged post-COVID.
“That’s not to say online shopping services were not already gaining popularity before 2020, but COVID-19 lockdown restrictions in physical stores and health concerns made a large number of people averse to visiting shopping centers and in turn to adopt a safer mode of no contact deliveries, which online retailers provided, as seen with the rise of speedy delivery services,” said Moima.
Furthermore, Dawie Roodt, the founder, director and chief economist of the Efficient Group, said e-commerce has become a more affordable and safer shopping option for consumers.
“E-commerce is cheaper, you order something, and it gets delivered to your doorstep. Shopping centers are becoming more of entertainment centers. Additionally, security is also an issue, it’s safer especially in South Africa to engage in online shopping than going to a physical shop,” Roodt told Connecting Africa.
E-commerce sector sees sustained growth
Last month, Takealot achieved its best day ever in terms of visits, orders and units processed on Black Friday.
Over the past year, Takealot recorded 29% growth in gross profit, with its marketplace growing to over 18,000 marketplace sellers and third-party sellers now making up 62% of the platform’s total gross merchandise value.
According to a recent report by World Wide Worx, a South African independent technology research and strategy organization, the country’s e-commerce turnover is expected to surpass R130 billion (US$7.7 billion) by the end of this financial year and the sector will acquire almost 10% of the country’s overall retail market.
For Roodt, accessibility and reliability have made e-commerce more appealing to consumers as retailers across all categories are reporting robust online performance as well as secure, seamless transactions which are now turning digital activity into real economic growth.
“E-commerce is becoming more entrenched and people are becoming more comfortable buying online due to the ease in doing business through apps and accessible payment systems,” said Roodt.
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South Africa’s e-commerce turnover is expected to surpass US$7.7 billion by the end of the 2025 financial year (Source: Image by Freepik)
In addition, Moima said e-commerce firms’ ability to invest in research focusing on consumer preferences and buying trends helps them innovate faster and attract more consumer interest.
However, she believes that the end of brick-and-mortar stores is not yet in sight.
“Given that not all e-commerce firms offer better affordability in terms of delivery fees, online vs. in-store promotions or have a wide range of product offerings in one place, consumers opting for in-store shopping is not a factor to write off as of yet. It’s too soon to say brick-and-mortar stores have reached their end of life,” Moima added.
According to World Wide Worx’s Online Retail in South Africa 2025 report, by 2027 online retail will exceed $8.8 billion and account for 12% of total retail turnover in South Africa.
Impact of multinational e-retailers
Multinational e-retailers such as Amazon, Shein and Temu are now operating in South Africa, offering low-priced goods.
In 2023 Shein was the most downloaded shopping app on the Google Play Store and in 2024 Temu was the most downloaded shopping app for Android users.
In 2024, Shein and Temu commanded a combined 37.1% share of South Africa’s e-commerce clothing, textile, footwear and leather (CTFL) market.
A report commissioned by the Localisation Support Fund found that in 2024, Shein and Temu made around $429 million in sales in South Africa.
According to Roodt, multinational e-commerce companies are of significant value to consumers as they are capable of offering low-priced goods and versatility.
However, he said these companies tend to avoid significant taxes and previously paid lower import duties due to the now defunct de minimis’ rule which allowed parcels valued under R500 ($30) to enter the country with a flat 20% customs duty and no value added tax (VAT). Meanwhile, local retailers had to pay 45% customs duty as well as 15% VAT on all imported clothes.
“Many domestic online retail businesses will close down because if you don’t have the financial muscle, retail skills and technology you won’t be able to compete with the Chinese or Americans. So, at the end of the day it’s a loss for local online retail businesses and the government but a win for consumers,” Roodt explained.
Moima agreed that increased competition benefits consumers, as they have more options at competitive prices, but disadvantages the local retailers.
“Although Shein and Temu offer South African shoppers affordability and a wide range of products, their competition could potentially have a negative impact on the value chain which local online retailers have established, as illustrated in a study conducted by the Localisation Support Fund,” said Moima.
Local retailers such as Checkers, Pick n Pay and Woolworths have managed to circumvent the emergence of e-commerce by combining their brick-and-mortar stores with their online stores and adding their own delivery services.
