Online retail may account for less than 2% of total retail sales in South Africa, but the covid-19 pandemic has encouraged consumers to shift to digital shopping and payments, and it has encouraged businesses to adopt online sales channels to keep revenue streams flowing.
“This epidemic is a shot of adrenaline in e-commerce. Jonathan Smit, of PayFast, an online payment processing solution, said: “habits formed now will continue in the future.”
Smit spoke in an interview with Warrick Kernes, founder of Insaka eCommerce Academy, at the PayFast e-commerce virtual summit held online on May 25 solstice 28.
SA businesses embracing online
“Online shopping trends have been happening anyway, but we are now forced to do so.” “Smith said.
According to the latest Nielsen study, 37 percent of south africans say they shop more online, and Smit adds that older people are embracing e-commerce because it poses fewer health risks than grocery shopping outdoors.
While brick-and-mortar retail will remain relevant for the long term, including in developed markets, companies need to use e-commerce as a distribution channel because it is the basis for future growth, he said.
When the nationwide lockdown began in South Africa, Mr. Smit said, PayFast’s transactions declined, but then exploded as people moved their businesses online to continue trading in a certain way.
As a result, the total number of new business account registrations at the online payment gateway has increased by 83% year-on-year since the lockout began. A few days ago, Smit said, it surpassed 4,000 new accounts for the first time in 30 days.
PayFast reported a 226 per cent year-on-year increase in new business account registrations in the food industry since the restrictions were imposed in mid-march. In order to keep trading during the lockdown, many local businesses have shifted their supplies to necessities, leading to a surge in the food industry.
Companies with e-commerce capabilities, such as Granadilla Swim and NetFlorist, can quickly make the transition to the supply of basic goods because they already have distribution channels, delivery relationships and sales platforms.
According to PayFast, grocery stores, supermarkets and bakeries were the retailers that benefited the most in the first two weeks of the lockout, with sales up 357%, while more subdivided product categories emerged, such as pet care and baby necessities. Significant sales growth.
Accelerating digital commerce
‘The epidemic has not created new trends, but has accelerated and expanded the business innovations that have occurred,’ Mr. Smit said.
Looking ahead, he predicts grocery delivery will become more common locally, as it provides consumers with a better way to take their products home without having to wait in line or be crowded.
In addition, he wants physical and online retail to blend more seamlessly. “Whether it’s clicking and collecting, whether it’s going to the store, whether it’s shopping online and delivering to your door, I think it’s going to be ‘retail ‘- part of the same ecosystem and part of the same machine.”