South Africa’s e-commerce market is expected to reach more than R400 billion by 2025, on the back of more than one billion transactions per annum., which anticipates explosive growth in the local e-commerce market, amid the accelerated digital adoption over the past two years.
Thokozani Dlamini, FNB Merchant Services CEO, says: “Not all major retailers were prepared for the sudden change, but those that were successful were the ones who could adopt a fast, reliable logistical solution in meeting the delivery demand. Key challenges to overcome were consumer trust in the fulfilment of sales where physical products had to be delivered, and logistical solutions to meet spiking demand.
As the COVID-19 crisis continued, e-commerce became a natural extension of the consumer’s shopping experience. The online shopping habits picked up by consumers during the pandemic areFNB Merchant Services says before the COVID-19 pandemic, e-commerce accounted for 8% of total card payment spend in the retail space. By the end of 2021, e-commerce accounted for 14% of total card payment sales, with travel and accommodation accounting for only 11% of that, it states.
“Larger retailers have bargaining power and with that potentially significantly lower input costs than an SME going virtual, but even so, their digital costs are significantly higher since they need to maintain a unique digital offering while data security is paramount.”