Emerging markets take to online retail

CONSUMERS in emerging markets, including South Africa, are entrenching cellphones as their online shopping channel of choice, and this is particularly true among younger shoppers, according to a survey released by PwC this week.

For 43% of local respondents, cellphones will become their main tool for shopping online, compared with 34% globally and 59% in China.

“This is a fairly significant difference and perhaps linked into the extent of mobile phone penetration in South Africa, which is over 100%,” said Anton Hugo, retail and consumer industry leader at PwC Africa.

It is estimated that there will be more than 52 million smartphones in South Africa by 2019.

“It is clear that in South Africa and in emerging markets mobile phones are the online shopping tools of choice,” said Hugo.

For 57% of local consumers, convenience is the primary reason why they shop online, compared with just 30% who do so for price. The rest of the world ranks convenience (47%) as the No 1 influencer over price (43%) when buying online.

“This . . . probably points to a higher-income group doing online shopping at this stage,” said Hugo.

In South Africa, 40% of consumers shop at their favourite retailer because they have a loyalty programme, compared to only 20% globally.

Hugo said this possibly pointed to the strength of South African retailers’ loyalty programmes.

Yet just over half of South Africans said they would buy from an online offshore retailer if they offered better prices. And 88% of the South African sample was influenced in some way by social media, compared with 78% globally.

Sometimes, heading to a physical store is an important part of the shopping process even if online is used as a research tool.

Consumer electronics is an area where 47% of South Africans carry out research online but 60% complete their purchase in-store, compared with 52% globally.

The global survey was of nearly 23 000 online shoppers in 25 countries, of whom about 1 000 were from South Africa.

Although online retail in South Africa is still a very small percentage of total retail, World Wide Worx estimates that it will reach 1% of total retail sales in this country this year.

This represented a growth rate of 20% a year since the turn of the century, said Hugo.