SA goes online for cheaper tech buys
Growth in e-commerce strong for smartphones, appliances
ALTHOUGH traditional retail stores dominate the South African market, consumers are choosing the online option for cheaper technical goods purchases. This is according to the latest research by GfK (Growth from Knowledge) South Africa, called “E-commerce 360: Navigating the Technical Goods E-Commerce Market in South Africa”, which showed that e-commerce retailers grew their share of the technical consumer goods market by 52% last year, accounting for 6.9% of total consumer spending by rand value for the year. This means they have nearly doubled their share of the market since 2015.
Cherelle Laubscher, the senior retail manager at GfK SA, said e-commerce was still in its infancy in SA compared with European markets, where a quarter of technical goods spending goes through digital channels.
“However, growth in SA is strong and shows no signs of declining as bargain-seeker flock online to buy technical consumer goods like smartphones, IT, consumer electronics, and major home appliances,” said Laubscher.
She added that although traditional stores dominated the market, they were not growing the value of the sales they generate in technical goods as quickly as the digital players. E-commerce retailers were seeing strong growth in smartphones, panel televisions, small domestic appliances, gaming consoles and laptops.
In the report, respondents cited better prices, attractive promotions and wide product selections as the main reasons for shopping online rather than at traditional stores, while experiential factors such as getting to see and touch goods motivated shoppers to go to physical stores.
GfK SA’s point-of-sale data showed that the consumer perception that e-commerce prices are lower than in-store prices was accurate: more than two-thirds of the top 100 sellers among technical goods products in SA were cheaper through digital stores than at physical retailers.
Across the top 100 products, online prices are an average of 4.7% cheaper.
Odette Jardim, the client solutions manager at GfK SA, said 45% of connected consumers in the survey claimed to increasingly use the internet to buy products online compared with 2016.
“However, a consumer journey often straddles both physical channels and digital channels, meaning the most successful retailers should have an omni-channel strategy,” said Jardim.
Kevin Tucker, the chief executive of PriceCheck, said although SA consumers may be lagging in the amount of online shopping they did compared with those in the US, for instance, with increased innovation and tech security, South Africa would continue to see growth.
Visit www.techandecommerceawards. co.za for more details.