Report: Consumer perspectives in South Africa – E-commerce

In December 2023, we surveyed 350+ South African consumers across various income groups, locations and ages, to better understand their e-commerce shopping habits, preferences and perceptions.

Stitch Team

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E-commerce continues to grow across South Africa. Whether shopping for groceries or household appliances, consumers are increasingly becoming more comfortable going online to find items and make a purchase. Today, more South Africans across income levels are spending more money, more frequently, online, on a wider range of goods.

This shift has happened quickly, as a little over a decade ago just more than half of South Africans had a bank account. Contributing factors beyond financial inclusion, including the proliferation of new, more accessible digital payment methods, including e-wallets, have sparked unprecedented growth.

The rise has been particularly acute since COVID-19, when restrictions placed on traditional retail outlets resulted in a 30% drop in in-store shopping. As a result, South Africans began turning toward home delivery vs shopping in stores. And it hasn’t slowed since. Today, the market is expected to grow at a CAGR of 12.5% from 2022 - 2027, with some financial leaders predicting a continued surge to a value of R225 billion by 2025.

In December 2023, we surveyed 350+ South African consumers across various income groups, locations and ages, to better understand their e-commerce shopping habits, preferences and perceptions, and how they view the world that’s changing around them.

We’ve outlined our findings in the report below.

E-commerce is growing fast across a range of categories in South Africa

Recent research from Statista indicated the penetration rate of e-commerce in South Africa is at around 49% and is forecasted to grow to 60% by 2028. We surveyed individuals that have made a purchase online in the last six months and found that those who do shop online are doing so frequently, and across categories.

The payments experience is much more important in e-commerce than in offline retail

The rules for e-commerce are slightly different than they are in the offline world. Customers have different considerations when choosing one e-commerce provider over another. While in brick and mortar retail, proximity is usually a major factor, in online commerce, consumers want a fast and secure payment experience.

This likely stems from the fact that e-commerce is still relatively new - people are still building trust in it - but it has important implications for merchants who are working to attract and retain customers in a competitive landscape.

Card remains king for online purchases, but other payment methods are gaining momentum

Credit and debit cards are still the favourite payment method for customers shopping online - which is unsurprising given their desire for ease and security. However, we found that a variety of alternative payment methods are rapidly gaining momentum, with Pay by bank maintaining a strong second position, and Capitec Pay making fast inroads.