E-commerce is on the increase in South Africa and is going to change the way business is conducted – and will open up opportunities for forward thinking companies and entrepreneurs, says Dieter Febel, MD of leading ISP, SA Gateway, sister company of Esquire Technologies, one of the leading distributors in Africa of IT, mobility, digital and lifestyle products.
“The e-commerce industry is growing around the globe – as well as in South Africa – and this is going to open up opportunities for those companies, and entrepreneurs, who harness opportunities. In South Africa – while e-commerce is growing – it is still in its kindergarten years, and those people who move to leverage it timeously will be the ones to truly benefit,” says Febel.
He says that the e-commerce sector in South Africa accounts for a very small percentage of the retail industry, and overall GDP contribution, when compared to developed countries. Some industry pundits say that e-commerce accounts for only 3% of economic activity in the retail sector in South Africa.
A report by McKinsey & Company stated that Africa’s iGDP, the measure of the Internet’s contribution to overall GDP, remains low at 1,1%. Meanwhile, South Africa reported 1,4%, which is significantly below that of global players such as the UK (5,4%), the US (3,8%) and China (2,6%).
Febel said the good news is that the rise in access to Internet and mobile services, as well as a fast-growing middle class, will foreseeably see South Africa’s e-commerce figures rise in the next few years. Assisting in this growth is the fact that Internet costs are coming down.
Earlier this year Google South Africa also stated that e-commerce was on the up in South Africa. The company went to market with a statement that the country’s e-commerce industry is expected to continue its growth in 2015 – this follows a 37% increase in query volumes during 2014.
The McKinsey & Company report also recently revealed that e-commerce could account for 10% of retail sales in Africa’s largest economies by 2025.