Massive increase in mobile spend by SA shoppers predicted

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South African shoppers spent an estimated R28.8 billion online in 2015, and this is expected to rise to nearly R46 billion in 2017. Mobile spend is expected to account for R19 billion of overall 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 forthcoming years,” said 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.”

According to the research, 57% of South African internet users (age 18+) have shopped online in the past 12 months. While South Africa’s online shopping trend is dominated by local purchases, with 59% of online shoppers only shopping domestically, some 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 that South African consumers will continue to purchase online, regardless of physical borders,” said Dahan. “Our aim as PayPal is to make it faster, easier and safer for people to shop online than ever before.”

The US, the UK, and China

Popular online shopping destinations for South Africans are the US, the UK, and China.
Among the reasons for shopping from these countries are better prices – 82% of cross-border online shoppers who have made purchases from websites in China are motivated by price – while the top reason for purchases from the US and the UK is access to goods not available in South Africa. This was the second-top reason for purchases from websites in China, followed by more affordable shipping costs.

North America is the most popular region for cross-border purchases, with 27% of South African online shoppers having made a purchase there in the past 12 months, closely followed by Europe at 20% and Asia at 19%.

“The research numbers above strongly demonstrate that South African consumers are becoming more avid shoppers, motivated by prices, variety and access to goods,” said Dahan.

The most popular category of goods for South African online shoppers is digital and downloadable entertainment and education items, with 44% of cross-border shoppers having purchased these goods from websites in other countries in the last 12 months. They include e-books, applications, digital music, films and videos, online video games, software and media content.

This is followed by fashion items (which 37% of cross-border shoppers claim to have purchased from websites in another country in the last 12 months), including clothing, apparel, footwear and accessories, consumer electronics (30%), including computers, tablets, mobile phones and peripherals.

These correlate with global trends where fashion, consumer electronics and digital goods are also the top shopping categories.

A motivation and a deterrent

Cost is both a motivation and a deterrent for online shoppers. Fifty percent of online shoppers who do not currently shop cross-border claimed delivery shipping costs as the top barrier for starting to shop from websites in other countries. Additional barriers include concerns about not receiving the item purchased (49%) and concerns about fraud (47%).

When it comes to what online shoppers considered 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 vs 50% among the global online shoppers surveyed), followed by a safer way to pay at (52% vs 47% among the global online shoppers surveyed).

“We can see two groups of drivers – delivery related drivers such as free shipping, and security-related drivers, such as a safer way to pay,” said Dahan. “PayPal is well positioned to help consumers overcome their concerns and boost their confidence in online shopping with services such as PayPal Buyer Protection and PayPal Refunded Returns Service.”

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%.

“It is really encouraging to see that PayPal is seen as one of the most trusted methods for online shopping. We are clearly making the right strides in helping consumers shop securely and with more confidence, and to benefit from access to unlimited goods from every tip of the world,” concluded Dahan.