|SA takes shopping online|
Wednesday, 18 April 2012 14:00
The number of South Africans shopping online is rising fast, according to the findings of the MasterCard Worldwide Online Shopping Survey.
Conducted across 25 markets between December 2011 and January 2012, the survey included South African banked customers, who access the Internet at least once a week.
The results show a significant increase in online shopping among South Africans, with 58% of respondents saying they use the Internet for online shopping. This is an increase from the 44% who did online shopping in 2009, and 53% from 2010.
According to MasterCard, the key concerns for online shoppers in SA are price (91%), payment convenience (90%) and secure payment facilities (90%). In terms of payments, 84% of respondents use payment cards or EFTs, and security is becoming less of a concern, with only 38% saying they are not convinced the medium is safe (down from 47% last year, and 59% in 2009).
The results of the MasterCard survey were cross-referenced with the findings of local research firm World Wide Worx (WWW). WWW MD Arthur Goldstuck says by combining their findings, they were able to gain a holistic picture of the online shopping market from both the consumer and industry perspectives.
“The findings backed up our research in the way online shopping evolves,” says Goldstuck, explaining that the digital participation curve is a key indicator of the propensity for online shopping.
“There are currently 8.5 million people online and only 3.5 million who have been online for five or more years. Propensity for online shopping is heavily dependent on the user's confidence in the entire online eco-system,” says Goldstuck.
“We have shown that once people are experienced Internet users and go online regularly, their propensity to shop online increases dramatically. The key is to convert that propensity into shopping behaviour.”
Goldstuck says, from 2013, the participation curve will rise significantly and quickly, which will, in turn, lead to growth in the number of online shoppers and the online shopping options available for customers.
The most popular online purchases highlighted by the survey were those products and services related to daily deal sites, online gaming, applications, music downloads and event tickets. Airline tickets were also one of the top online purchases. E-commerce statistics for SA in 2011 showed that air tickets accounted for 77%, or R8.9 billion of the market, while other online retail accounted for just 23%, or R2.6 billion.
Goldstuck says this is explained by the fact that such products are better as virtual products and, therefore, it makes more sense for the consumer to make such purchases virtually.
A significant 95% of respondents said they had visited a daily deal or coupon Web site, while one-quarter of visits translated into actual online purchases.
“Group buying is changing the online propensity to shop,” says Goldstuck, adding that sites such as Groupon are an entry point into online shopping for many users. “However, depending on the experience those users have, this can negatively impact the possibility of them trying to shop online again.”
Research shows the current split of the group buying market locally sees Groupon with 68% market share, Wicount with 21%, and the other sites making up the remaining 11%. Goldstuck notes major players such as Avusa have already failed in this space with their offering Zappon.
“The reason why the daily deal offerings from the media houses have failed is because of the digital participation curve. Media sites reach the 8.5 million online users, but they can't convert them from having the propensity to shop to actually shopping.”
Local is lekker
Goldstuck says the growth of daily deal and coupon sites shows how the online and offline environments can work in tandem. Seventy-eight percent of online shoppers say they look at online reviews before making a purchase.
“Many people now conduct product research online before making a purchase in-store. Retailers that avoid the virtual option for fear of cannibalisation of customers are in fact missing out on a powerful driver of traffic through their physical stores,” says Goldstuck.
In terms of the behaviour of SA's online shoppers, Kalahari is the most popular online retailer with 13% of the market. This is followed by Amazon with 6% and Bid-or-Buy with 6%.
Goldstuck says the benefits of shopping online locally are becoming more visible. According to the research, barriers to foreign online shopping include the fear of hidden costs (50%), the local availability of products (40%) and the perception of local being more convenient (37%) and safer (34%).
According to Goldstuck, mobile commerce is still in its infancy and WWW statistics from last year showed just 12% of mobile Internet users had made a purchase with their phone. Thirteen percent said they hadn't but were planning to in the next six months, while 75% had not and did not intend to.
“Getting people to shop on their phones will depend heavily on retailers making products available in such a way that it will make sense for the consumer to make that purchase in that environment,” says Goldstuck, adding that virtual products are leading the way in this regard.
“The mobile platform doesn't yet fill the user with confidence. So something that can be delivered immediately to the customer's phone will have a much higher chance of being bought. The payment mechanism is also key – it must be a seamless experience.”
Add your 2Cents
Newer news items:
Older news items: