WHILE e-commerce in South Africa more than doubled from 2018 to 2020, Seacom, a private communications and cloud solutions provider, has highlighted that the country needs more inclusive digital growth.
Steve Briggs, Seacom’s chief sales and marketing officer, said improving digital literacy was crucial for making this happen, but it could not be achieved without making internet access more widespread and affordable in low-income communities.
“For e-commerce to both boost the economy and benefit our citizens, the online world of retail cannot be accessible only to some. If the future of retail is going increasingly digital, we need to get more South African businesses and consumers on board to drive our digital economy forward,” said Briggs.
Covid-19 has boosted demand for home deliveries, with research by World Wide Worx finding that online retail grew from R14.1 billion in 2018 to R30.2bn last year. This upward trend was set to continue, with forecasts putting online retail sales at about R42bn by the end of this year.
In a Mastercard survey of 1 000 South Africans, 71 percent of respondents said they would continue to shop online post-pandemic. Rand Merchant Bank has estimated that e-commerce would grow by 150 percent by 2025.
Seacom said it was clear that the sector was primed to accelerate, and the country needed to ask what could be done to allow more South Africans to participate in the digital economy and benefit from its time and cost savings and efficiency.
A report by Accenture found that “countries with lower broadband data costs have higher penetration rates and enjoy stronger e-commerce sales”.
Briggs said connectivity could be an enabler of more inclusive economic growth, because it could improve consumers’ ability to find products and services at more competitive prices and have them delivered to a desired location, freeing up time to do other things. Network-based trading platforms could also help sellers to reach new markets, enabling entrepreneurs.
“But e-commerce offerings themselves also need to change to make this inclusive digital growth a reality, with many retailers forced to focus their online efforts on more affluent markets, due to access to payment platforms and infrastructure,” said Briggs.
He said they could see signs of this starting to change as secure payment methods provided customers with a greater variety of trustworthy payment options, and mobile phones become “the sole payment channel for many consumers in developing countries”.
Seacom said the recent dramatic increase in e-commerce had been more prevalent in developed countries, in part because of widespread access to fast and affordable internet.
As of January, 59.5 percent of the global population was connected to the internet, whereas South Africa’s internet penetration was 57.5 percent. Compared to Northern Europe, which has an internet penetration of 96 percent, it was clear that the country had a long way to go to make internet access more inclusive, Seacom said.
The digital divide was more worrying among South Africa’s low-income communities. In 2019, Statistics SA reported that only 1.2 percent of households in rural areas had access to the internet at home, which meant they had either to use more expensive mobile subscriptions or use the internet when they visited bigger towns.
BUSINESS REPORT