Low growth in online grocery shopping

Among the major South African retailers‚ only a handful have set up online stores and the impact on the bottom line is yet to be felt. Even the two most active retailers with an online presence - Pick n Pay and Woolworths - derive less than 1% of their total sales from Internet retailing.

According to Bra‚ this is a direct consequence of the low penetration of Internet in South African households.

"At 11%‚ it is four times lower than Brazil although both countries have a similar gross domestic product (GDP) per capita‚" he says.

By global standards online shopping activity in SA is small but retailers are optimistic that it will increase.

Faster and cheaper broadband will be the tipping point for e-commerce in SA‚ Woolworths chief executive Ian Moir says.

"It's still slow in SA and you don't have the delivery infrastructure that you've got elsewhere. There are security issues but all this will eventually be overcome. There will be a tipping point and the acceleration once that point has been reached is remarkable‚ as we've seen in other markets," he says.

"Online will come. We are spending a lot of money to make sure we have the best platform‚ so when the tipping point comes we are prepared and able to maximise our sales and our profit from this channel‚" Moir says.

Mike Cotterell‚ general manager of Pick n Pay's Online Shopping says gaining the trust of customers in using credit cards online was a challenge but this has had improved "dramatically" over the years.

According to Cotterell‚ the typical online grocery shopper has historically been in the higher Living Standards Measure (LSM) groups‚ but is now moving further down the bands.

"We see our typical shopper as someone who is looking for convenience‚" Cotterell says.

Stanlib retail analyst Theresa Heath predicts that e-commerce in SA will grow a lot quicker than estimated.

"A lot of people have access to the Internet via smartphones. When online grew in developed markets‚ smartphones didn't have the penetration‚ so people had to have access to a computer to shop online‚ whereas now you don't need that‚" she says.