Online shopping to grow 70% in 2016
Consumers are determinately connecting to the cyber world, and one of the things they are discovering is the value they can get from online shopping.
These include vast amounts of products to choose from, price comparison, cheaper alternatives and faster and flexible delivery options.
What are the key drivers?
Last year a study conducted by Ipsos, in association with PayPal in South Africa, showed a growing interest in online shopping.The Ipsos study, surveyed 501 adults who made use of electronic devices to access the Internet.
Of the results, 22% of the respondents said they had made purchases online and 48% expect to do so in the future.
According to the respondents, the key drivers of online shopping are lower product costs, with 88% saying that this is important, 85% say faster delivery is important, 82% say flexible delivery options are important and 75% of online shoppers say safer ways to pay is important.
Without the hassle, if they did not have to keep re-entering payment or delivery details, seven out of 10 online shoppers mentioned that they would be more likely to shop online. Fifty one percent of South African online shoppers feel that if they did not have to register to websites, which prolongs the process, they would be more likely to shop online
Popular trends revealed
With a real concern over security issues, 67% of non-online shoppers said online security of payments is a reason for not shopping online. While 58% say not receiving items they purchased is a reason they do not shop online.
The study also revealed the trends in the most popular shopping categories for South Africans online. Fifty two percent of online shoppers purchased digital goods, 50% purchased event tickets, 45% purchased some form of travel and transportation item and 38% purchased fashion, consumer electronics and physical equipment.
Seventy percent of mobile shoppers used their phone to shop online, whether it is from home or the office. Forty five percent of mobile shoppers preferred to shop by using an app, while 26% of mobile shoppers preferred to shop from a mobile browser.
Shedding light in 2016
Fast forward into the year 2016, where PayPal released results of a global survey conducted by Ipsos, and we are enlightened about the consumer shopping habits in South Africa. The survey found that online shopping in South Africa is expected to reach R37 billion this year.
The figures show mobile spend is expected to grow 70% this year and account for R19 billion of online shopping in 2017.
“There is no doubt that the rapid penetration of smartphones in South Africa will continue to be the driving force of online shopping in the upcoming years,” says PayPal’s regional director for Africa and Israel, Efi Dahan. “I believe that the smartphone shopping experience will continue to evolve as consumers feel greater comfort and security.”
Online shopping in South Africa is expected to grow by 29% and reach R37 billion by the end of 2016. South African shoppers spent an estimated R28.8 billion online in 2015, and this is expected to rise to nearly R46 billion in 2017.
Cross boarder findings
The research shows that in the past 12 months, 57% of South African internet users are aged +18. Fifty nine percent of online shoppers only shop domestically, 37% say they shop online both domestically and cross border, and a further 5% only shop cross-border.
"Though international shopping is still less popular locally, with the growing variety of products, larger range of prices, improved shipping options and increasing confidence in e-commerce, we believe SA's consumers will continue to purchase online, regardless of physical borders," says Dahan.
“The research numbers below strongly demonstrate that South African consumers are becoming more avid shoppers, motivated by prices, variety and access to goods.,” says Dahan.
Popular online cross-border shopping destinations for South Africans are the USA, UK and China. Eighty two percent of online shoppers who have made purchases from China are motivated by price,followed by more affordable shipping costs, while purchases from the US and UK are motivated by easy access to goods not available in South Africa.
Twenty seven percent of South African online shoppers, in the past 12 months, have made a purchase in North America, followed by Europe at 20% and Asia at 19%.
A motivation and a deterrent
The most popular category of goods for South African online shoppers are downloadable entertainment and education items, including e-books, applications, digital music, films and videos, online video games, software and other media content. This is closely followed by fashion items including clothing, footwear and accessories at 37% and consumer electronics including tablets, mobiles, laptops and computers at 30%.
Cost is both a motivation and a deterrent for online shoppers, says Dahan. Fifty percent of online shoppers who do not currently shop cross-border claimed delivery shipping costs as the top barrier for shopping on cross boarder websites. Additional barriers include concerns about not receiving the item purchased (49%) and concerns about fraud (47%).
When considering what would make them more likely to buy from a website in another country, the figures for South Africa are similar to those globally. The number one driver is free shipping (selected by 53% of South African online shoppers versus 50% among the global online shoppers surveyed), followed by a safer way to pay at (52% versuss 47% among the global online shoppers surveyed).
For South Africans, the most popular online payment method for cross border shopping is PayPal (68% of cross-border shoppers have used PayPal for online transactions / purchases from websites from another country in the past 12 months) followed by the main competitor, Visa Credit card with 37%.
