Online retail in South Africa has soared by 66 per cent in just two years, a new research released on Wednesday has showed.
The study attributed the feat to the explosion in demand for home deliveries brought about by the Coronavirus Disease.
Conducted by World Wide Worx, with the support of Mastercard, the study revealed that the total growth for online retail in the country in 2020 rose to R30.2bn (66 per cent).
“The most astonishing aspect of this total is that it surpassed the R14.1bn reached in 2018, in just two years,” said World Wide Worx Managing Director, Arthur Goldstuck, a principal analyst on the research project. “It is also 50 per cent higher than the total forecast for 2020 three years ago, when online retail in South Africa was expected to reach R20bn by 2020.”
In 2018, the R14.1bn in online retail represented 1.4 per cent of total retail, estimated then at R1.07tn. Online had outpaced traditional retail growth in the past 20 years, since it came off a low base, but traditional retail still grew every year until 2019.
In 2020, it slumped as a result of COVID-19 lockdown and economic stress.
According to preliminary data from Stats SA, at current prices, total retail fell by 4.2 per cent to R1.05tn at current prices.
“While equivalent growth cannot be expected for 2021, it can be stated confidently that it will exceed the 30 per cent growth of 2019, when expansion was organic and a factor of the evolution of shopping habits and retail strategies.
“Those factors remain in place, along with the massive boost given to both areas of evolution since the pandemic began,” Goldstuck said.
As part of the projection, he said total online retail sales could go around R42bn in 2021, taking the online percentage of total retail to around four per cent, assuming traditional retail returns to its previous growth path.
Country Manager at Mastercard, South Africa, Suzanne Morel, stated, “This trend appears to be here to stay, as 71 per cent of respondents say they will continue to shop online post-pandemic.
“Now more than ever, people need access to the digital economy, and all of us at Mastercard are constantly working to make the online shopping experience more inclusive, simple, seamless and secure for everyone, whether you’re shopping for essentials or experiences.”
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