E-commerce insights

E-commerce growth potential: Why you should consider selling online

As we move through the first half of 2020, we find ourselves in a very interesting period. We’re aware that we’re in a global recession, as South African chain Massmart has recently announced hundreds of store closures. What does this mean for businesses? 

Now might be the best time to move towards e-commerce if you haven’t already done so, as physical stores face the challenge of promoting foot traffic and increased risk of layoffs. E-commerce is a growing market at the moment, and is set to continue along this path despite the economic climate looking questionable.

What is e-commerce?

If you’re still not sure what e-commerce is, we’ll provide some examples to make it clearer. You’ve likely seen posts on Facebook marketplace, adverts from Takealot and Instagram’s new interactive shopping ads. These are all examples of e-commerce, which refers to transactions that take place over the internet. The main advantage of e-commerce is that you can sell to anyone while you are located anywhere in the world. This is really useful and opens up the opportunity to earn passively. Your customers do not have to spend money travelling to your store, and they can easily browse through to your store to find specific items. Starting an e-commerce website is a low-cost way of creating an online presence for your brand.

What kind of growth can I expect from the ecommerce industry?

There are always concerns when entering into a new market, especially since there are a lot of unknowns, which can be challenging. However, you’ll be glad to know that statistics from around the world are indicating massive growth for the e-commerce industry:

  1. Over 20% of the global population shops online – which is a huge potential customer base. However, you’ll need to make sure your e-commerce store stands out from the rest in order to have a chance at capturing your share of this demographic.
  2. Experts are predicting that the e-commerce industry will see over $4.8 trillion by 2021 – which isn’t very far off! This marker indicates massive growth and strong activity is occurring in the e-commerce market – surely your business would like to share in this revenue?
  3. Around 85% of shoppers check reviews before they commit to a purchase. This is huge, because it indicates that customers are becoming more tech savvy, and rely on peers for honest reviews. If you’re not online and therefore not being reviewed, you’re potentially losing out on sales, because the customer trust has not been demonstrated to your prospective buyers.
  4. Around 95% of active adult social media users will follow a brand on social media. This is huge and opens up the possibility for your e-commerce store to market on social media and other channels. There’s no reason why adult consumers won’t follow your brand, too, as long as your content is high quality!
  5. Mobile commerce will make up around 45% of e-commerce revenue by 2020. That’s this year! If you’re not accessible to a customer on a mobile device, you’re missing the mark. Don’t despair, as it can be relatively simple to set up an e-commerce store with the help of professionals.
  6. A whopping 73% of customers are ‘omnichannel customers’, meaning they interact with multiple channels during their customer journey, and include both online and offline shopping. This is taken from a study of real customers, and shows us that brands need to be available on a variety of different platforms to ensure that they’re consistent with their customers. The number of purely online and purely physical store customers is in the minority, so it’s important to showcase your brand as accessible to the majority of your audience.
  7. New payment methods are on the rise, such as virtual payments (Apple Pay, Snapscan, Zapper), and cryptocurrencies. The increase of alternate payment methods will allow for a frictionless user experience, and will allow more options for e-commerce buyers. Many of these systems are best synced with an e-commerce store.
  8. Artificial Intelligence (AI) is being used by major retailers to learn more about shoppers, as well as how to best serve existing customers and suggest better personalized items. One fashion brand, Natori, saw a 76% increase in revenue after undertaking AI projects that improved their  ad spending. This will increase in 2020 and for the rest of the decade.

E-commerce in South Africa

While it might be true that South Africa is lagging behind international e-commerce giants in other countries, such as Amazon and eBay, there is still growth happening in the e-commerce industry. Currently, South Africa has the 37th biggest e-commerce market share in the world, behind world leaders such as the United States, China and Japan.

In a report from December 2019, it was shown that e-commerce sales grew in South Africa by 20-35%, with some specific stores reaching growth of 300%! This figure is set to grow year-on-year in line with global e-commerce growth trends, which signifies that it’s still crucial to get started with an e-commerce store.

Current projections indicate that the e-commerce market in South Africa will grow by 6.7% annually, which will result in more active users and more revenue accrued. It is also predicted that the number of e-commerce customers in South Africa will skyrocket to around 32 million, which is a hefty number and covers more than half of the population. The average revenue per user is set at around $116.85, which is roughly R1861.18 but will fluctuate due to fluid exchange rates. Even with the fluctuations, this is a fairly high amount of spending per user, and indicates a growing e-commerce market. Better still, the average spend per user is set to grow in the next five years, adding an extra R150 to the average spend by 2024.

Which kinds of businesses could benefit from ecommerce?

The short answer is all businesses, because that’s the way the entire face of trading seems to be moving. However, there is currently a boom that certain businesses may not know about, which could be used to their advantage.

B2B businesses, an abbreviation for business-to-business, is no longer limited to wholesalers or retailers in exchange with one another. There’s a huge audience out there – e-commerce businesses – that can benefit from software that can improve automation. B2B businesses such as SaaS (software as a service) and tech companies are in the spotlight at the moment, because they are leading the B2B industry and setting the example for other e-commerce businesses. B2B merchants should specifically make sure that they can handle large volumes of orders and automated invoicing, along with other specific features that will allow repeat customers to stay satisfied amongst an ever-growing pool of competitors.

Fear not, as B2C (business-to-consumer) business are still one of the most popular types of e-commerce stores. These stores involve selling directly to a consumer, and B2C e-commerce stores are often able to make use of their ability to reach global customers. The dropshipping business model, which includes only placing product orders once you’ve received a customer order, and means that a store does not hold much inventory. Dropshipping is advantageous because the store owner does not need to worry about inventory, packaging or shipping costs, as these become the responsibility of the supplier.

In South Africa, clothing and apparel stores are some of the fastest growing e-commerce stores, but this sector often faces high turnover as more staff are needed to ensure smooth business operations continue.

Following that, the next biggest growing e-commerce stores are General stores (like Takealot or Amazon), Arts/Crafts and Decor, Home and Garden, Alcohol and Cigarettes and Food/Drink/Groceries.

This covers a lot of businesses, and even if your business doesn’t fit any of these categories, your customers will still appreciate your business staying relevant and up to date with market trends by staying online. 


To summarize, it’s clear that the e-commerce market has made itself prominent over the past couple of years, and is set to experience future growth in the next couple of years. Market projections indicate that the e-commerce climate in South Africa is growing overall, despite the market lagging behind global leaders in the industry. 

There is currently a massive boom for B2B and B2C businesses, as e-commerce allows barriers to fall away, creating an atmosphere of accessibility for businesses. Dropshipping is a popular model for B2C businesses, and involves placing orders on demand so that no stock is stored by a business. This might be the way forward for your business, if you need a solution that can look after your packaging and shipping concerns.

In South Africa, clothing and general stores are seeing the most growth, while other types of stores are closely behind. Statistics have shown that customers are doing more online research than ever before, and buyers are more likely to purchase from an e-commerce store after reading reviews from fellow buyers. It’s imperative, then, that your prospective customers are able to research your business online – you may see your sales increase after a couple of good reviews.

You can even look out for new technology in the world of e-commerce, known as v-commerce or ‘voice commerce’ which allows individuals to make purchases using voice commands!

If you’re looking for an immediate solution to assist with your e-commerce marketing, you should consider ShoppingFeeder. ShoppingFeeder simplifies the process of multi-channel marketing, including stock management for your store and synchronization across all channels. 

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