GARDEN ROUTE | KAROO NEWS - Groceries, books, beauty supplies and inflatable children’s pools. Online shopping in South Africa has more than doubled in the past two years and is expected to grow as buying habits change with ongoing lockdown regulations and the continued risk of Covid-19.
Trade has been around since ancient times, with bartering being traced back to 6000 BC.
Fast forward to 2021 and now we have the ability to sit in the comfort of our own homes and have a piping-hot meal delivered right to our door within an hour.
Although South Africans are rapidly latching onto online shopping, some people still have fears about the credibility of transactions and the safety of their banking details.
The country had 38.19m internet users as of January 2021, which is 64% of its total population and, according to Data Portal, an increase of 1.7m from a year ago. This means that almost two thirds of South Africans are active internet users. Of this, 57.7% are active online shoppers and have bought a product online at least once over the past year.
This growth is largely due to a growing middle class and society’s desire for instant gratification. Whatever the reason, however, online shopping is convenient, contactless, seamless and safe. No wonder people are embracing the idea of having products delivered to their front door without having to leave their couch.
Covid-19 spurs online shopping
Online shopping has gained much traction as a result of the Covid-19 pandemic, with people choosing to stay safely at home rather than venture into busy shops. There was a 24% increase in online shopping from 2019 to 2020. This is in line with the worldwide growth rate of 26%.
In 2020, South Africa was ranked the 37th largest e-commerce market in the world, with a total of $4b (around R54b). This means that there is huge potential for entrepreneurs to start their own businesses, and a seemingly neverending range of products for the South African consumer to choose from.
Who is shopping online?
This is a breakdown of online shoppers by age group:
- 16-24: 53.4%
- 25-34: 61%
- 35-44: 63.1%
- 45-54: 70%
- 55-64: 36.6%
What do South Africans buy?
Because of current trends in South Africa, it is predicted that consumers will spend less on luxury items and more on essentials. (Deloitte, 2021).
South African behaviour
When it comes to shopping online, different products necessitate different shopping trends. Between June and November 2020, this is how consumers shopped online:
- Weekly: Food delivery (36%)
- Monthly: Online retail (42%)
- Less than once a month: Classifieds (34%).
Food delivery
People use food delivery apps on a weekly basis. With faster delivery times, functional apps, and more and more stores opting to have an online presence, it is easy to see why.
Online retail
Online retail stores see traffic from consumers who make purchases on a monthly basis. This covers a broad range of consumer goods, from clothing to books and electronics. These are typically household items that are often easier to purchase online than in a physical store.
Classifieds
The online classifieds sections such as Facebook Marketplace or Gumtree see traffic less than once a month. Shoppers who use these platforms are often looking for specific products and are not in a rush to get them.
International online shopping
Clothing, footwear and accessories are items South Africans mostly buy online from abroad. This is according to a study by online
payment platform PayPal.
South African online shoppers purchasing from overseas chose the US as their shopping destination of choice (34%) due to
better prices‚ availability and variety of styles‚ followed by China (28%) and the UK (16%).
International online stores that ship to South Africa include Asos, Amazon, Ebay and Iwoot, but it’s always best to verify and double check shipping and import costs when buying from an overseas retailer.
Local stores and e-commerce
Apart from the big consumer brands in the e-commerce sphere, there is a huge influx of people creating and starting their own
e-commerce websites.
While starting an e-commerce website can seem daunting, it is often considerably easier than opening a brick-and-mortar store. Just
ask the entrepreneurial dynamo, known only as Keddi, who created a thriving e-commerce store from scratch.
She banded with other women across the world and opened factories in various countries, including Malawi, Kenya and Ghana as the advantages of an online store include smaller overheads and easier access to global markets.
Advice for future ‘e-entrepreneurs’
Taking a leap into the e-commerce realm was the best thing Keddi ever did and she encourages anyone with a passion to do the
same.
“If you find something that you absolutely love and are deeply passionate about, do it.” CEO of Insaka Ecommerce Academy Warrick Kernes shares this sentiment. “Ultimately, the only way that you can go about setting up an online business is by taking action.”
Payment options
One of the most off-putting things about shopping online is the fear of scams. Putting one’s credit card details on any site is scary. However, security measures on e-commerce sites have become very sophisticated over the years. According to Statista, credit card
payments account for almost half of all online transactions.
Breakdown of South Africa’s most common payment methods:
- Credit card: 41%
- Bank transfer: 20%
- eWallet: 17%
- Cash: 11%
- Other: 11%
Shipping/courier and import fees
A Deloitte Digital report has found that the ‘perceived high cost of delivery makes online shopping less attractive to lower-income consumers, a market segment in South Africa yet to be unlocked’. However, flexible delivery is also a key incentive for online shoppers in South Africa.
The service you select, for example snail mail or courier, will determine the price, tracking options and speed. You might be charged additional import fees by customs when shopping from outside of South Africa.
These fees are often around 60% of the value of your items, depending on the type of product and can be charged when you check out, you might be contacted by the courier once it arrives at customs or prompted to pay with delivery.
Returns and refunds
What happens when you decide that you don’t like the product? Or worse, it’s broken, defective or even the wrong size?
The ability to return and/or get a refund on a product are key considerations of online shoppers. While most of the corporate, bigger players have sophisticated portals for customers to submit a return, Keddi believes niche online stores are not at a disadvantage.
“Mistakes do happen; a product may be broken or defective upon delivery. The beauty of being a smaller online store is that you can
easily WhatsApp us and we can come and collect and/or replace the product.’’
Stay safe when paying online
As more South Africans turn to online shopping because of the coronavirus pandemic, internet connectivity increases, and more shops going digital, knowing how to stay safe when shopping online is crucial.
The new Protection of Personal Information Act of 2013, enacted on July 1, aims to help protect your personal data and how companies or entities process your data.
However, there is still a lot that you can do from your side to protect your information online, especially sensitive information, such as your bank card details, ID number, passport number and shipping address.
Here are four tips from the payment app SnapScan on how you can protect yourself when paying online:
- Protect your bank card detailsThere are three pieces of information that someone needs to use your card to shop online:
The card number: This is the 14–16-digit number that is unique to your bank card and account.
The expiry date: This indicates when you will need a new bank card and is often written in the format of MM/YY.
The CVV number: CVV stands for card verification value. This three- to four-digit security code is printed on either the front (Visa and Master cards) or back of your card (American Express cards).
If someone has these three pieces of information, they may be able to use your card illegally for online shopping. If possible, try not to share this information with anyone, not even family or friends. Even if someone is unable to shop in your name using these details, because payments may need to be confirmed via your banking app, criminals can call the bank and try and impersonate you to possibly change your pin or password.
2. Make sure you are shopping on a secure website
When shopping online, check the web address, sometimes called the URL, of the site you are using and where possible, avoid websites that start with
only HTTP, and not HTTPS. Hypertext transfer protocol secure (HTTPS) is a more secure version of hypertext transfer protocol (HTTP). HTTPS and HTTP are part of the foundation of the internet and help to send data from your computer to the website you are visiting, and vice versa.
However, HTTPS is more secure as it encrypts your data. When you are buying online, you are sending your bank details to a certain website and if that connection is
unsecure, they could be intercepted by cybercriminals.
3. Protect your data on your computer
These days, some internet browsers, Google Chrome and Mozilla Firefox, offer to save personal information such as passwords or bank card details for you, so that you don’t have to enter them every time. Please resist. It is tempting to choose that option, but rather not. If your computer is lost or stolen, someone can access your
banking details.
Another temptation to best avoid is saving your card details in your shopping profile on an online shop. By doing this, you will run the risk of your personal and/or bank card details being exposed in a possible data leak. The data of 24m South Africans was exposed in a credit bureau Experian breach in 2020.
4. Get to know and understand 3D security
If you have ever used internet banking, you have probably used 3D Secure without knowing its name. These days, when you log onto internet banking or are shopping online, you are asked to confirm your login or transaction, sometimes by entering a code the bank has sent you via SMS or by entering your pin on your internet banking app.
This is all part of what is called 3D Secure, an added layer of internet security. If possible, avoid shopping on websites that do not integrate 3D Secure.
Online shopping payment options
With the world still in the grip of Covid-19, more people have turned to online shopping. According to research by local technology firm World Wide Worx
released in May, online shopping more than doubled in the past two years, ‘thanks to the explosion in demand for home deliveries brought about by the Covid-19 pandemic’. While online retail spend in South Africa amounted to R30.2b, this is only 2.8% of total retail spend in the country.
Takealot, South Africa’s largest online retailer, offers these payment options:
- Ozow
- PayFast
- Mobicred
- Masterpass by Mastercard.
Superbalist, another large online retailer, also lists:
• SnapScan.
As the number of online shoppers continues to grow, South Africans should familiarise themselves with the different payment options and how they work.
Ozow
Ozow is a middle-man between you, your bank and the online retailer to help transfer your money fast, safely, and securely. Transfers can be done via SMS, eBilling or QR codes. According to its website, it is currently supported by Absa, FNB, Nedbank, Standard Bank, Capitec and Investec.
PayFast
PayFast works on a similar basis. One of its more popular features is Instant EFT, which does not have the traditional two-day wait. Instant EFT is currently supported by these nine banks: FNB, Absa, Standard Bank, Nedbank, Capitec, Investec, TymeBank, African Bank and Bidvest.
Mobicred
This is a credit facility that allows you to shop now, but pay later. The platform supports over 1 000 retailers, and enables users to access special offers. Mobicred allows shoppers to make one single monthly payment for all of their online spend.
Masterpass by Mastercard
This is another online payment solution that allows you to shop online safely and securely. Once you have entered your personal details and debit and/or credit card
information, you can select this option without having to enter the information again. There is also an app that allows you to shop at supported
local retailers.
SnapScan
SnapScan is a mobile payment solution that allows you to pay by scanning designated QR codes. It was launched in 2013 and was later bought by Standard Bank. It now supports over 60 000 merchants and has expanded to enable users to send money to friends, settle bills, buy airtime, electricity and more.
*Information accurate as far as verifiable at the time of publishing.
