In previous years, the disparity between incomes in South Africa has had an impact on the performance of internet retailing.
The high costs of bandwidth did not allow low-income and middle to low-income consumers to have access to the internet at home, and as a result, only 11% of the total population had access to the internet.
However, an improvement in accessibility means that these consumers now have the option to buy the likes of cosmetics online.
According to Euromonitor analyst, Christy Tawii, more consumers are shopping online as the payment methods have been simplified over the years. Most websites used to only accept payment via credit card, but now more and more sites have payment options for EFT, Bitcoin and loyalty points.
“Internet retailing has seen a 20% - 30% value growth mainly because of the convenience, expansion of digital devices such as tablets and smart phones and increased competition within the online retailing segment.”
Still a niche platform...
While internet retailing still remains niche, leading players in segment include kalahari.net, a platform for health and beauty products.
Mr Price made their mark in online shopping in 2013, as they have an option for customers to select their goods online and pay for them when you collect them instore. This, therefore made consumers who have security concerns more open to shopping online.
Internet retailing is expected to register a value CAGR of 16% in South Africa over the next 4 years up to 2018 at constant 2013 prices, as growth drivers are expected to be better internet accessibility at home, and mobile phone access should trigger value sales of overall internet retailing, thanks to the increasing number of smartphones over the forecast period.