e-Commerce: SA booms, Africa plays catch-up

While South Africa enters an e-commerce boom, the rest of Africa has a long way to go to catch up with the rest of the world in terms of online trading.

This emerged in separate studies this week. A report issued by research and analyst firm World Wide Worx said online retail in South Africa had entered a phase of sustained acceleration.

The firm’ s The Online Retail in SA 2011 study shows that the total spent on online retail goods in South Africa passed the R2-billion mark (around USD2.85 million) in 2010 for the first time. It reached R2,028-billion, growing at 30% over the previous year. This is set for serious growth over the next few years, as the country’ s number of experienced internet users grows dramatically.

World Wide Worx MD Arthur Goldstuck says years of research indicate that internet users need up to five years to become comfortable with the internet before they begin transacting online. Therefore, South Africa’ s increasingly mature internet user base is driving online spend significantly.

This is more evident in the developed world, where there are far higher proportions of mature internet users. ComScore reports that US online spend in the last quarter of 2010 alone totaled more than USD43 billion, and is growing steadily

Meanwhile, according to speakers at the Netprophet conference in South Africa this week, no African country comes close to the 1% of total retail spend that goes to online trading.

Facing an ongoing uphill battle against high bandwidth costs, lack of infrastructure and the fact that large proportions of the population are unbanked, Africa has a long way to go before e-commerce takes off across the continent.

Speaking at the Netprophet conference in Cape Town, Oliver Rippel, MIH CEO of ecommerce for Africa and Middle East, said this presented first mover advantages to those bold enough to pioneer e-commerce across Africa. MIH is investing in many e-commerce brands across the continent. The firm sees great growth potential as a result of a growing African middle class, better internet access and alternatives to credit card payments arising in the continent. New payment solutions such as M-Pesa could help drive e-commerce in Africa, he said.

With 2010 seeing a sudden spate in new undersea cables bringing much-needed bandwidth to Africa, as well as dropping internet and hardware prices and government moves to improve access and support entrepreneurs in the ICT space, Africa could soon be joining the e-commerce wave sweeping the rest of the world, it seems.

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