A study says that South Africa’s online shopping will bring in more than $7.42 billion this year
South Africa’s online retail turnover is projected to exceed 130 billion rand ($7.42 billion) this year, representing 10% of total retail sales. This growth is fueled by on-demand grocery and fashion, alongside the entry of global competitors like Amazon (AMZN.O), according to a study.
In 2024, online retail sales experienced a growth of approximately 35%, reaching an estimated 96 billion rand and representing about 8% of total retail trade in South Africa, as reported in a study published on Thursday by World Wide Worx in partnership with Mastercard, Peach Payments, and Ask Afrika.
The most rapid and noticeable growth continues to be in grocery retail, where the transition to digital has been hastened by the uptake of on-demand shopping apps from market leader Shoprite (SHPJ.J), opens new tab, along with its competitors Pick n Pay and Woolworths (WHLJ.J), opens new tab.
At the same time, the increase in online fashion sales is fueled by retailers enhancing their digital platforms, offering superior user experiences and more effective size and fit guidance, according to Arthur Goldstuck, CEO of World Wide Worx, a research firm.
Online retail has transitioned from a marginal experiment to a fundamental force within the economy. He added that nearly one in every 10 rand spent at retail will now be online.
The arrival of Amazon last year has additionally spurred growth. The U.S. retailer currently accounts for 12.3% of online shoppers, following Shein and Temu, which together hold a combined 15.3% in second place. According to the report, Takealot is utilized by 31.9% of shoppers, establishing its position as a market leader.
In 2023 to 2024, Shein and Temu quickly established themselves, achieving an estimated turnover of 7.3 billion rand and capturing nearly 40% of the online clothing sales market in 2024. Goldstuck noted that the closure of tax loopholes, stricter customs enforcement, and the resilience of local retailers have lessened their impact.
“He stated that their growth is now anticipated to decelerate, indicating a coexistence with, rather than a displacement of, established players.”
