Taking stock of South African eCommerce after the 2012 holidays

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Shortly before Christmas last year, we took a look at changing attitudes towards online shopping in South Africa. The Visa eCommerce Tracker Survey revealed a gradual expansion of online purchasing over the course of the year, while some shoppers still remained apprehensive due to concerns about shipping or handling fees, that goods wouldn’t arrive on time, and worries that goods would not arrive as per specifications. As we begrudgingly stow away our Christmas decorations, we take a look at the eCommerce landscape after the holidays and where it’s headed in 2013.

According to a study presented last year by research company World Wide Worx, eCommerce — which contributes two percent to South Africa’s gross domestic product (GDP) — continues to grow by about 0.1 percent a year. The eCommerce industry, the study says, is rising at a rate of around 30 percent. The report also reveals mobile phone penetration in the country to be close to 80% percent, signalling optimistic outlooks for mCommerce as smartphones are predicted to account for 50% of the South African market by 2013.

Loot.co.za, the online retailer who successfully closed a funding round recently, released some findings related to its 2012 Christmas shopping sales.

For the most part, Loot.co.za’s sales figures aligned with eCommerce growth in South Africa. CEO Gary Hadfield, says the retailer saw notable growth in areas like toys and electronics, the latter of which saw increased sales of more than 80%.

The World Wide Worx report notes that “smartphone users, in turn, eventually become Internet users.” Indicating room for growth, Loot.co.za reported lower mobile shopping figures, with 10% of Loot.co.za’s traffic over the Christmas period having come from mobile devices.

As noted by the Visa report, one major concern among online shoppers is the timely delivery of goods. Loot.co.za is reporting 98% on time delivery for the 2012 Christmas season.

According to the World Wide Worx report, South Africa had approximately 8.5-million internet users by the end of 2011, a 25 percent increase over the 2010 figure of 6.8-million, fueled by smartphone growth in the country. Following the trend in the US, and with more people coming online, Loot.co.za is predicting a growth in shopping decisions influenced by reviews on social networking sites like Facebook and Twitter, as well as customer reviews on blogs or ecommerce sites themselves.

With social media still emerging in the country, Hadfield harps on the importance of having a social media presence. “The role of social media in eCommerce is something which cannot be underestimated. Our Facebook page allows us direct and instant contact with customers on a daily basis, and has now reached over 21 000 fans. We have also recently launched some Pinterest competitions, which have been very successful,” says Hadfield.

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