This report examines South Africa’s burgeoning online retail industry, with a particular focus on large online only players like Takealot, and the increasing ecommerce capacity of the country’s major traditional retailers. The report includes detailed information on the state and size of the sector, developments and corporate actions and company performance. It includes comprehensive information on the effect of coronavirus and outlines developments emanating from the outbreak as well as from technological advances. There are profiles of 40 companies including major international companies such as Amazon and Alibaba, online only players such as Takealot, marketplaces including Bidorbuy and OneDayOnly, omnichannel retailers including Woolworths, Pick n Pay and Shoprite and classified companies such as Gumtree.
South Africa’s online retail sector, though small by the standards of developed international markets, has been growing rapidly in scope and value. Despite enjoying double-digit sales growth for many years, online retail’s share of South Africa’s retail trade was still below 2% in 2019. The industry has huge long term growth potential. Investment in technology and supply chains is increasing, and the coronavirus outbreak and lockdown has driven an unprecedented boom in online spending and adoption. However the crisis has also affected the economy, employment, investment and incomes, and put pressure on consumer spending.
The coronavirus outbreak and economic lockdown had a huge impact on the online retail industry. It is estimated that online retail sales grew by around 40% during lockdown. International forecasts suggest that year-on-year growth may be in the region of 100%. A key impact of the crisis has been the huge increase in ecommerce adoption among businesses and consumers who otherwise may not have entered the online market for some time. There has been huge growth at many of the omnichannel retailers, although online gains have been partly offset by declines in consumer spending in physical stores and the wider retail sector.