3 mins read

SA online retail could grow to 10% – Bob Shop owner

Online retail is perfectly positioned to grow market share from 5% to 10% in the near term as consumers more eagerly embrace online shopping and look for more diverse e-commerce experiences.

This is according to insights shared by merchant-and-consumer-focused company Bob Group, which also predicts that 2024 will be the year South Africa’s own offerings start accelerating.

Read: Bidorbuy’s new ‘everything ecommerce’ company with uAfrica to empower SMEs

Bob Group, which owns Bob Shop (formerly Bidorbuy), says a review of historical data proves there has been a shift in consumer buying patterns, with online sales in recent years surpassing the growth of traditional retail sales.

“Analysts are seeing emerging consumer needs and expectations that go beyond being able to shop online,” said Bob Group MD Andy Higgins in a statement.

“The result is that growth in online retail comes not from increasing demand but from consumers shifting existing purchase behavior from physical shops to online stores and apps.

“Buyers are embracing online shopping and using their mobile devices more and more.”

Local expansion

Amazon.co.za’s much-anticipated arrival in South Africa this year, which will see it compete with local giant Takealot, adds weight to the Bob Group’s forecast of growth in the sector.

Amazon, which made the announcement last year, has already started registering the interest of independent sellers looking to trade on the platform with the start of a registration process late last year.

The multinational marketplace is also likely to put some pressure on traditional local retailers such as Mr Price, Shoprite, TFG, Massmart, Woolworths, Pepkor and Pick n Pay.

Read:
Naspers boosts SA investments ahead of Amazon arrival
Amazon’s arrival to boost SA’s online sales – The Foschini Group
Here’s how big Cotton On’s SA business really is …

Growth in the market bodes well for consumers who will likely enjoy greater shopping choices and competitive pricing.

According to Bob Group, e-commerce trends show that more consumers are interested in cross-border purchasing capabilities, an area Amazon already has considerable expertise in.

“One of the biggest [trends] was an increase in cross-border e-commerce, with buyers purchasing more from outside South Africa and having items delivered locally using services specifically set up for this purpose. Another was the increasing use of lockers for e-commerce deliveries,” the firm said.

Higgins adds: “Due to the lower cost and greater convenience, more buyers are making use of lockers and pickup points to have their orders delivered.”

Bob Group marketplace head Craig Lubbe points out that as the sector develops, sector players are going to have to ensure they grow along with it and meet the local consumer’s evolving needs.

“We’ve seen an increasing number of retailers and other sellers investing in better imagery and rich content for certain products,” he says.

Partnering with the right courier has also become essential to building a brand, he adds. “Since these service providers are effectively an extension of the seller’s business, their performance is critical when it comes to offering customers an excellent shopping experience.”

Read:
Online retail sales pass the R50bn mark: study
Exclusive: Durban venture capitalists buy Gumtree SA from eBay-linked Adevinta