More South Africans connect to online shopping
Online retail in South Africa has finally turned around.
By the end of this year, online spending on retail goods in South Africa is expected to have grown by more than 35percent, after 33percent growth in 2006.
The total spent on online retail goods in South Africa in 2007 is expected to be R929million, up from R688million in 2006, according to a World Wide Worx report entitled Online Retail in South Africa 2007.
These figures exclude the sale of air tickets online, which continue to dwarf the numbers for online retail.
The five South African airlines selling tickets online, namely kulula.com, FlySAA.com, Mango, 1Time and Nationwide accounted for R2,3billion in e-commerce last year, almost four times the size of conventional online retail.
The figure is expected to rise above R3 billion this year.
These numbers indicate a dramatic turnaround in online retail in South Africa, which appeared to be stagnating in 2005. The 2006 recovery is being sustained in 2007, with all indications being of even more dramatic growth in 2008.
"There are two major factors behind this growth," says Arthur Goldstuck, MD of World Wide Worx.
"The first is the rise of broadband, which by the end of next year will see more than a million users in South Africa.
"The second is a phenomenon called the Experience Curve, which shows that only once users have been online for around six years are they comfortable with the more challenging aspects of the Internet, such as e-commerce. And the number of people who have been online for six years or more has finally reached the level where it is making a substantial impact in online retail."
Both of these factors were forecast by World Wide Worx as prerequisites for future growth as early as 2004.