Lo­cals get the hang of the dig­i­tal shop­ping cart

CityPress - - Business - XOLANI MBAN­JWA xolani.mban­jwa@city­press.co.za 0 So-rce: PayPal Graph­ics24

South Africans are be­com­ing more con­fi­dent dig­i­tal shop­pers, and a re­cent Ip­sos In­ter­na­tional study shows that lo­cals have spent at least R28.8 bil­lion shop­ping both on­line and while us­ing their mo­bile devices.

Efi Da­han, PayPal’s re­gional di­rec­tor for Africa and Is­rael, said the com­pany, which man­ages 68% of all dig­i­tal pay­ments, ex­pected the rate of on­line and mo­bile shop­ping to grow by 29% to R37.1 bil­lion by the end of this year, com­pared with 37% growth last year.

The Ip­sos study also es­ti­mated this would in­crease by 24% by the end of 2017 to R45.9 bil­lion as the on­line and mo­bile shop­ping ex­pe­ri­ence evolves, mak­ing cus­tomers feel more se­cure when mak­ing dig­i­tal pay­ments.

“South Africans are more at­tracted by the price of the prod­ucts they see on­line, the ser­vice they get and the surety that their items will be de­liv­ered on time. If re­tail­ers wake up to this fact and in­clude it in their cus­tomers’ ex­pe­ri­ence, they will reap the re­wards by not be­ing left be­hind,” said Da­han.

South Africa was one of 29 coun­tries cho­sen for the study, which sam­pled more than 800 on­line shop­pers from each coun­try.

Da­han said South Africans were mostly in­ter­ested in fash­ion items, and be­came more con­fi­dent to shop more on­line and use their mo­bile devices to buy prod­ucts when the ex­pe­ri­ence they had was good.

“There are lots of op­por­tu­ni­ties for en­trepreneurs lo­cally to take ad­van­tage of this growth and in­vest in de­liv­ery and ship­ping as there are gaps there. They can work with on­line mer­chants to en­sure goods get to buy­ers be­cause ship­ping costs and the surety that their items will ar­rive are a con­cern for con­sumers,” said Da­han.

How­ever, the fig­ures have been ques­tioned by Arthur Gold­stuck, a tech­nol­ogy an­a­lyst and MD of World Wide Worx. He said the fig­ures were in­flated with items that should not be con­sid­ered un­der the Ip­sos study.

Gold­stuck said that while he agreed with the study’s es­ti­mates that on­line and mo­bile shop­ping was on the rise, he was chal­leng­ing PayPal’s in­clu­sion in the study of the money spent on cell­phone air­time, air­line tick­ets, and travel and leisure prod­ucts. “We agree that on­line shop­ping is be­com­ing huge in South Africa, and we es­ti­mate that it will grow by be­tween 20% and 30% a year. But we feel that it is widely ex­ag­ger­ated that you in­clude those items that con­sumers them­selves do not feel are on­line or mo­bile pur­chases. When in­ter­na­tional com­pa­nies do th­ese stud­ies, they do not dif­fer­en­ti­ate be­tween ac­tual retail on­line shop­ping and other types of spend­ing. Cell­phone air­time, which has been in­cluded in this study, should be kept sep­a­rate. We also feel that the 810 peo­ple they in­ter­viewed were highly ac­tive in­ter­net users. They should have mixed a va­ri­ety of in­ter­net users, in­clud­ing new users, and the pic­ture would be very dif­fer­ent,” said Gold­stuck.

The rea­son on­line sales were up was be­cause mer­chants such as Mr Price, which posted an in­crease of 111% in lo­cal on­line sales in 2015 to R96 mil­lion with 13 mil­lion vis­its to its site, were start­ing from a low base and this made for a “dra­matic” in­crease, he said.

While South African on­line and mo­bile sales are in­creas­ing rapidly, they were only 0.3% of the R868 bil­lion to­tal lo­cal retail sales last year, as re­ported by Stats SA.

VALUE ZAR MM

50

40

30

20

10

0 Fore­casteb growth in to­tAl on­line spenb (2016) Gro­ceries, fooW, Wrink P al­co­hol

BaRy / chilWren’s smp­plies

Leismre, hoRRies P omtWoors

Event tick­ets

Hom­se­holW gooWs

Health P Reamty

24%

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