Call for SA's big retailers to continue investing in local e-commerce sector to make it mainstream

South Africa's big retailers needed to continue to invest in eCommerce, to make it more mainstream among South Africans.

South Africa's big retailers needed to continue to invest in eCommerce, to make it more mainstream among South Africans.

Published Feb 28, 2024


South Africa's big retailers needed to continue to invest in eCommerce, to make it more mainstream among South Africans, and not something just for a select few, says Craig Lubbe, the Head of Marketplace at Bob Group.

The company that offers everything ecommerce to everyone and makes online buying and selling more accessible and inclusive said e-commerce businesses must also continue to innovate in areas such as payments and logistics to ensure that more people choose this as a viable way to purchase goods and services.

In an interview with Business Report following the Insaka eCommerce Virtual Summit roundtable held online on Wednesday, Lubbe said the government needed to ensure that international players were operating fairly in South Africa. “Many consumers are excited about cross-border shopping, often not being fully aware that they may not enjoy all the protections that consumers enjoy when shopping from local businesses,” Lubbe said.

The head added that consumers in South Africa still had not fully embraced eCommerce. “We believe that with the push from local and international businesses in this space, smaller local businesses will have space to thrive and not just survive. Local businesses must remain focused on their customers and their needs. Doing this will ensure that they remain relevant and competitive.”

Warrick Kernes, the Founder of the Insaka eCommerce Academy said eCommerce businesses in SA have faced the challenge of competing with retail giants, both online and offline, for decades so while the competition was increasing this was not something new. He said to thrive in this evolving landscape, local sellers must leverage their unique advantages and create a solid and sustainable competitive edge.

Lubbe said having new entrants into the South African market was not necessarily a new challenge when it comes to the eCommerce sector. He said South Africa still had scope for growth when it comes to eCommerce. “I believe the new interest from large international operations speaks more to the potential of our market than an impending challenge. Local eCommerce businesses in South Africa have what it takes to deal with the ever-changing landscape.”

Kernes said the survival and competitiveness for local eCommerce businesses extended beyond offering the lowest prices. He said building a brand that resonated with consumers on a personal level, creating raving fans, and prioritising exceptional customer service were critical. “Focusing on email database growth establishes a sustainable direct line of communication with customers, reducing reliance on ad spend budgets. Exploring strategies like white labelling and private labelling empowers businesses with a unique brand identity, while agility remains a constant advantage for SMEs in adapting to market trends and consumer preferences faster than larger companies can.”

The founder said local eCommerce businesses need access to comprehensive education to navigate the complexities of the online marketplace and accelerate their growth, like what was offered through the Insaka eCommerce Academy. “Collaboration within the industry is essential for mutual support and growth. Additionally, government support is crucial in ensuring a level playing field by enforcing correct procedures and customs duties for international sellers. This collaboration between entrepreneurs, the government, and industry players fosters an environment where local businesses can thrive.” Kernes said.

According to the Insaka eCommerce Academy, South Africa’s eCommerce industry was facing a major shake-up ahead of Amazon opening their digital doors this year. It said the arrival of the international giant promises to drive eCommerce innovation and growth, as they took on local marketplaces.

To unpacking how local entrepreneurs could navigate and take advantage of the changing status quo, the Insaka eCommerce Virtual Summit will take place on 6th and 7th of March this year.

In the summit, representatives from the likes of Amazon, Takealot, Makro, Google, and Shopify, will be sharing their expertise and insights about taking an eCommerce business to the next level.

According to analysis, South Africa was the 48th largest market for eCommerce with a predicted revenue of US$4,542.9 million by this year, placing it ahead of Ukraine.

Revenue was expected to show a compound annual growth rate (CAGR 2024-2028) of 9.3%, resulting in a projected market volume of US$6,494.9 million by 2028. With an expected increase of 12.3% in 2024, the South African eCommerce market contributed to the worldwide growth rate of 10.4% in 2024, according to the market analysis.