eCommerce Popularity

More than half of SA’s population that is online at least once a week is willing to shop on the Internet, and the number is growing. Convenience is deemed more important than cost for most consumers and the trend is being driven by group-buying, airline tickets and digital media purchases.

These are the findings of a new MasterCard worldwide online shopping survey. The survey found that the number of SA shoppers buying online has increased steadily in the past two years, up to 58% in 2011, from 53% in 2010 and 44% in 2009.

The survey looked at 25 markets and surveyed individuals between the ages of 18 and 64 with bank accounts.

MD of research and consulting firm World Wide Worx, Arthur Goldstuck, says the findings back up his own research into online shopping and its evolution in SA. He says the longer a consumer has been using the Internet, the greater their propensity to shop online.

Goldstuck says that last year, of the 8,5m Internet users in SA, only 3,75m had been online for longer than five years. This ratio is expected to remain fairly consistent in coming years, even with more people getting online. He says confidence in shopping online takes time to develop and that a bad experience can put a consumer off and result in them returning only years later.

The findings suggest that virtual products such as airline tickets, cinema tickets, applications and other products that can be fulfilled instantly are the most common purchases in SA. “An airline ticket is just a reference number so it makes far more sense to buy it online,” says Goldstuck.

He says group buying is also becoming a significant driver of online purchases, in part because it can’t be done offline, but also because consumers drive one another to sites like Groupon to take advantage of offers.

In terms of physical purchases, accounts for the highest percentage (13%), Amazon – despite having no SA presence – accounts for 6%. SA auction site Bidorbuy also has 6%.

The survey found that 37% of men are likely to buy online compared to 29% of women. Goldstuck attributes this to men’s fondness for the perceived prestige of the process.

Travel accounts for purchases by 87% of respondents, up from 77% in 2010. Just over 70% had made hotel bookings online in the last three months prior to the survey.

The survey also reveals that SA consumers prefer not to shop online for groceries, with only 9% of respondents using these channels. This is a sharp decrease over the previous year’s survey. Goldstuck attributes this to inflexible delivery schedules and too many errors in orders.

Security is less of an issue than it has been in previous years, with 38% of respondents saying that they are not convinced that the medium is safe. This is a sizeable decline from the 47% in the previous survey, and down from 59% in the 2009 results.

Of those that do shop online, 94% also use their mobile phones for Internet browsing, but only 12% of respondents made purchases though these devices. The main purchases on mobile phones are applications, music and cinema tickets.

Goldstuck says retailers need to realise that online retail “can work in tandem with the bricks-and-mortar environment” particularly because “many people now conduct product research online before making a purchase in-store”.

He says retailers that avoid online channels for fear of cannibalising their physical customer base are doing themselves a disservice. — Craig Wilson, TechCentral