Who Owns Whom

The Online Retail Industry in South Africa

Gary Phillips | South Africa | 06 November 2021

The Online Retail Industry in South Africa

The South African online retail industry was one of the few winners in 2020, which digital economy commentators believe was a “tipping point” for online retailing’s penetration of the retail market. While online retail is growing rapidly in South Africa, it remains small in revenue terms relative to sales at retail stores. Internationally, seven of the top ten largest listed companies globally are digital platform providers and they are occupying an increasingly important place in the global economy.

Pandemic Boost

Online sales rocketed in 2020 as South Africans took to online ordering to avoid leaving their homes, and there was a sharp increase in demand for grocery deliveries. Besides the purchase of airtime and data, the most popular products bought online were clothing and groceries. Major retail chains rapidly expanded their online services by launching new brands and through acquisition. Logistics, warehousing and delivery have become increasingly critical, while independent retailers are concerned about the huge investment required in technology and distribution capability.

Innovation

Online retailing, particularly in South Africa, is a relatively new and developing industry, which means it is characterised by high levels of innovation and change. Recent acquisitions of small startup online retailers and tech providers such as Pick n Pay’s purchase of Bottles and Imperial’s purchase of Parcelninja show that much of this innovation can take place in the margins and large retail ecommerce businesses are on the lookout for disruptive developments. Technological innovation centres around user experience and order fulfilment .

Report Coverage

This report examines the latest trends in South Africa’s flourishing online retail industry, giving particular focus to large online-only companies such as Takealot, growth in online trade among South Africa’s national retailers and key issues for smaller retailers entering online trade. It includes comprehensive information on the state of the industry, growth, innovation and the performance of the major players. There are profiles of 41 companies including global players such as Amazon and Alibaba, the major local companies including Takealot (Takealot, Superbalist and Mr D Food) and Massmart, and retailers that are significantly increasing online sales such as Shoprite, Pick n Pay and Woolworths.

Table of Contents

PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 8
2.2. Geographic Position 9
3. SIZE OF THE INDUSTRY 10
4. STATE OF THE INDUSTRY 32
4.1. Local 32
4.1.1. Corporate Actions 36
4.1.2. Regulations 36
4.1.3. Enterprise Development and Social Economic Development 38
4.2. Continental 39
4.3. International 43
5. INFLUENCING FACTORS 45
5.1. COVID-19 45
5.2. Economic Environment 46
5.3. Rising Input Costs 48
5.4. Technology, Research and Development (R&D) and Innovation 50
5.5. Environmental Concerns 52
5.6. Labour 53
6. COMPETITION 57
6.1. Barriers to Entry 59
7. SWOT ANALYSIS 59
8. OUTLOOK 61
9. INDUSTRY ASSOCIATIONS 61
10. REFERENCES 62
10.1. Publications 62
10.2. Websites 63
APPENDIX 1 64
Summary of Notable players 64
COMPANY PROFILES 69
Alibaba Group Holding Ltd 69
Amazon.com Inc 72
Bidorbuy (Pty) Ltd 76
Bolt Services ZA (Pty) Ltd 78
Bubblestorm Management (Pty) Ltd 80
Carbonite Inc 82
Caught Online (Pty) Ltd 84
Clicks Group Ltd 85
Cotton On South Africa (Pty) Ltd 89
Dis-Chem Pharmacies Ltd 92
Evetech (Pty) Ltd 103
Fashion United SA (Pty) Ltd 105
Foschini Group Ltd (The) 107
Gumtree South Africa (Pty) Ltd 112
HomeChoice (Pty) Ltd 113
Jade E-Services South Africa (Pty) Ltd 115
JD Consumer Electronics and Appliances (Pty) Ltd 117
Loot Online (Pty) Ltd 119
Massmart Holdings Ltd 121
Mr Price Group Ltd 127
Munyhub Online Ticketing Services (Pty) Ltd 133
Naspers Ltd 135
NetFlorist (Pty) Ltd 138
OneCart (Pty) Ltd 139
Onedayonly Offers (Pty) Ltd 140
OrderIn (Pty) Ltd 142
Pick n Pay Stores Ltd 144
Quench Delivery (Pty) Ltd 149
Shopify Inc 151
ShopLi (Pty) Ltd 154
Shoprite Holdings Ltd 155
SPAR Group Ltd (The) 161
Spoiler Tags (Pty) Ltd 167
Takealot Online (RF) (Pty) Ltd 168
Truworths International Ltd 173
Uber Technologies Inc 179
VMS Group (Pty) Ltd 182
Woolworths Holdings Ltd 184
Wootware Computers (Pty) Ltd 188
Yuppiechef Online (Pty) Ltd 189
Zara Retail South Africa (Pty) Ltd 191