Consumer spending online rises 30% to R2,6bn

9 Jan 2012

South Africans spent about R2,6bn online last year, 30% more than in 2010, research from World Wide Worx shows.

"The final numbers are not yet in and this figure could grow to almost 40%," World Wide Worx MD Arthur Goldstuck said late last week. "There were a few key ingredients that the growth can be attributed to."

"Firstly, there has been significant growth in internet users that have been online for more than five years." These people are just waiting to be persuaded to spend their money online, he said.

"Secondly, websites are far more user-friendly now with more payment options. More and more evidence shows people are using retail websites to make purchasing decisions and to do research, which has meant the websites have become an integral tool."

According to a World Wide Worx research report, entitled Online Retail in SA 2011, the total retail market in SA was worth R561bn in 2010 with online retail accounting for R2bn or 0.36%.

This is up almost threefold from 0.13% of total retail sales in 2004, but remains a small part of the overall pie. As online retail sales grow, however, there is clearly much potential to realise in this market, Mr Goldstuck said.

This has been the case for latecomer to the market for luxury goods Forevermark - a diamond brand of jewellery produced by De Beers. The brand introduced in 2008 has found its online presence has helped people to learn more about the brand and driven sales in the East, Forevermark CEO Stephen Lussier said.

Local high-end retailer Woolworths said the number of customers and sales have grown each year. "Improved connectivity and online user experience has been the key to driving e-commerce activity. Many Woolworths customers are transacting on our site from work, possibly for convenience. The range of products available online will continue to grow, as will the delivery coverage area," the company said.

In the US, world's largest ecommerce market, online retail was about US$165bn in 2010.

Even as traditional retail sales fell in 2009 in response to the worldwide recession, global online retail sales grew 14.5% in 2009 to $348,6bn. The biggest contributor was electronics, making up about 22.6% of the market, the research report says.

According to the report, in terms of proportion of all global retail, online retail sales accounted for only 2.5% of the total. For the top 100 retailers worldwide, online retail accounted for 6.6% of sales. By 2014, global online retail is expected to reach $778,6bn, increasing at 22.2% a year.

Source: Business Day

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