The local online e-commerce market is currently estimated at just under R200bn per annum, up from R90bn in 2019 and R142bn in 2020, and has already exceeded pre-pandemic 2025 projections, according to FNB Merchant Services data.
Source: Getty
Originally dominated by digital goods such as airline travel and accommodation, the nature as well as the scale of the e-commerce sector has changed, with restrictions on travel and gatherings pushing consumers to turn to e-commerce for an increasing array of goods and services.
Key indicators of growth
FNB Merchant Services statistics indicate an explosion in the growth and variety of the e-commerce sector since 2019:
• Before the Covid-19 pandemic e-commerce accounted for 8% of total card payment spend in the retail space. At that stage, the sector was largely (35%) made up by spend on travel and accommodation (T&A).
• By the end of 2021, e-commerce accounted for 14% of total card payment sales with T&A accounting for only 11% of that.
• Despite T&A restrictions heavily impacting online spend in 2020, total online sales jumped 55% that year and another 42% in 2021, driven by increased spend in less traditional e-commerce industries.
• Excluding T&A, online spend doubled (102%) in 2020 and continued its surge in 2021 with another 39% in growth.
• Transactional volumes are just as robust – estimated at 500 million for 2021, up from 200 million in 2019 and 345 million in 2020.
• Average purchase values are declining as smaller retail and lower basket items gain traction with purchase values declining 12% from R450 in 2019 to R390 now.
• FNB Merchant Services estimates that South Africa’s e-commerce market will reach more than R400bn by 2025 on the back of more than 1 billion transactions per annum.
Need to focus on omnichannel retail strategy
According to Thokozani Dlamini, FNB Merchant Services CEO: “Not all major retailers were prepared for the sudden change, but those that were successful were the ones who…
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