Low-cost smartphones could boost e-commerce in SA
As more low-end smartphones enter into the South African market and undercut one another, smartphone sales are likely to plummet. For instance there are low-cost smartphones that have already entered the South African market such as the Android-powered MTN Steppa, retailing at just R499 and the Vodafone Smart 4 Mini retailing at R899.
Africa has a very low smartphone and internet penetration rate compared to that of the rest of the world and a large portion of its population simply cannot afford high-end smartphones. For this reason alone there is massive growth potential for low-cost smartphones in South Africa, as they can provide internet access to all income brackets and not only to those who can afford high-end smartphones.
Internet access needed in rural areas
Internet access is especially needed in rural areas where the introduction of online transactions would benefit consumers economically, preventing them from having to travel long distances to make payments or circumventing poor infrastructure conditions.
Currently the lack of internet access is largely what is hindering South Africa's e-commerce industry. The 2013 State of Broadband Report, released by the UN Broadband Commission in September reveals that 25.5% of South African households have internet access, putting the country at fifth place on the continent, 44th among developing countries and just above the 24% average for the 128 developing countries measured in the report for household internet access.
It will take a while before new internet users gain the confidence and experience using online retail sites, to become active online shoppers. However, as internet access improves and the newer generation plays into the future market, the number of experienced users will begin to accelerate and Africa's e-commerce boom will take off.
