South Africa – Country Commercial Guide

Assessment of Current Buyer Behavior in Market

South African online sales increased by 66% from 2019 to 2021 to more than $1.8 billion (ZAR30 billion). The top e-Commerce product category in South Africa behind data and airtime is clothing and apparel followed by online entertainment. Groceries saw an increase of 54 percent from 2019, driven by the pandemic and lockdown restrictions. There is also growth in most food delivery platforms from both grocery and fast food/convenience. UberEATS is available in South Africa and competes with the local platform called Mr. Delivery. Consumers are price sensitive favoring online promotions and coupons.  South Africans are spending more time online researching better prices and seeking product recommendations on social media.

Local eCommerce Sales & Regulations

The Electronic Communications and Transactions Act 2002 (“ECTA”) is the main legislation regulating eCommerce in South Africa. This Act regulates electronic communications and transactions including consumer protection and cybercrimes. Ecommerce businesses must also comply with the Protection of Personal Information Act (POPIA). 

Cross-Border E-Commerce 

South Africans purchase mostly from South African websites or online marketplaces, but 27 percent purchase from the United States, and 14 percent from Europe. The U.S. version of Amazon.com is the third most visited e-commerce website in South Africa. If a South African imports goods in excess of Rand 10,000 or more than three times a year they will have to get an importers code, irrespective if it is for personal or business use. 

Online Payment 

Credit cards and debit cards are the most preferred payment methods. Consumers also use e-wallet services and EFT for online payment. Due to the growth of credit card fraud, the Payment Association of South Africa mandated the use of 3D Secure in 2014. Merchants have reported that increased flexibility in the application of 3D Secure to online transactions in recent years has reduced cart abandonment by consumers. Currently, around 71 percent of potential customers abandon their carts because of payment gateway failure.    

Mobile E-Commerce 

Cell phones have largely replaced wallets, as banks, card operators, retailers, and communications companies provide alternatives to cash as a means of payment.  M-commerce, where cell phones are used to pay for goods and services, has advanced beyond mobile banking to debit and credit transactions.  M-commerce is particularly attractive in South Africa due to the rapid increase in the number of smartphones, and poor fixed-line infrastructure. This provides an immense opportunity for online retailers, as mobile spending is projected to increase. Companies need to include mobile optimization in their eCommerce offerings to increase the buying experience. 

Digital Marketing

Social media platforms are becoming more pervasive as marketing tools in South Africa. More than 90 percent of South African major brands advertise on social media platforms.   On a consumer level, growth for most networks has slowed down, but engagement by users has intensified.

Major Buying Holidays 

International online sale days such as Black Friday and Cyber Monday are popular in South Africa and offer opportunities for retailers to reach more customers. In 2020, Black Friday online sales increased by 50% compared to 2019 and 66 percent of those purchases were made via mobile devices.

Wrapping up

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