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Online shopping grows 40% in two years

by TMO Reporter
March 18, 2023
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Online shopping grows 40% in two years
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Online shopping in South Africa shot up from 27% of adult South Africans in 2020 to 38% in 2022.

The comprehensive results of the Online Retail in South Africa 2023 study, released by World Wide Worx with Mastercard, shows that the growth in the proportion of the population’s shopping behaviours indicates a 40% increase in the total number of people shopping. The initial findings from the study, released at the end of 2022, coincidentally showed close to 40% annual growth in total online retail spend over the past two years.

“The most revealing aspects of the new data lie in demographic differences between South Africans,” said World Wide Worx CEO Arthur Goldstuck, principal analyst on the research project. “The gender breakdown in particular shows that the traditional gender divide in online shopping, which was dominated by males in the early years still persists, with 41% of men and 36% of women shopping online.”

 A contributing factor to men dominating the online shopping space is due to them purchasing electronic goods more frequently, which traditionally is a male shopping domain. However, the fact that the biggest growth areas in online shopping in recent years have been in groceries and apparel categories, traditionally dominated by women shoppers, suggests there are other factors at work.

“These may well include elements like male control of household budgets and men being more likely to have a credit card in a household,” said Goldstuck. “It shows that outmoded societal norms die hard.”

The study included analysis of the annual Target Group Index (TGI) survey conducted by Ask Afrika, which interviews 16 000 South Africans every six months to gather data on their consumption (products, brands and the media), purchasing behaviour, attitudes, motivations and beliefs. This survey provides the most detailed demographic breakdown of online shopping available in the country.

The age breakdown of online shoppers in South Africa has seen a significant shift from 2020 figures. During the pandemic, online shopping had ‘normalised’ across age groups, and at the time, an average of 27% to 30% penetration was seen in all age groups up to the age of 64. Only in the 65+ age group did we see a significant drop off (down to 19%).

Two significant shifts

The research points to two significant shifts in 2022. The first was that the pattern of shopping by age returned to a previously observed pattern, namely that online shopping peaked in the 25-34 age bracket, and then steadily dropped off with each successive age group. The second major shift observed during the past year, was in the significant drop in penetration of online shopping among the 65+ age group. This is the only age group that sees lower penetration than during the height of the pandemic.

“One conclusion that we can draw from the research is that online shopping is strongly correlated with age, but with the youngest age group constrained by lack of earning ability,” said Gabriel Swanepoel, country manager of Mastercard Southern Africa. “A second conclusion is that the oldest age group has a strong reticence towards online shopping, which is backed up by another finding that this bracket is the most likely to still prefer in-store shopping experiences.

“Now, more than ever, it is crucial for retailers to understand their consumers. Understand who they are, where they are, and how our country’s economics affect them. This will assist in understanding how and where to reach the targeted consumers, therefore creating a seamless consumer experience from online to in-store.”

While most age groups show a relatively high level of agreement with the statement that in-store shopping is preferable to online (24% to 30%), this figure increases dramatically to 41% in the over-64 category. No other demographic measure shows such a strong divergence in one segment regarding preference towards in-store experiences.

The metrics that showed the highest positive correlation with online shopping were:

  • Education, rising from 20% for those with less than a matric qualification to 54% of those with tertiary education
  • Income, rising steadily from 22% for those earning less than R2 500 a month to 62% for those earning more than R50 000

Said Goldstuck: “The results are in effect a blueprint for online retailers, showing on the one hand where they will reach their most lucrative customers, and on the other the segments they must target to grow online retail further in South Africa.”


 

 

Tags: Ask Afrikaconsumersdemographicsgendermediamenonlineonline shoppingresearchSouth AfricaTarget Group IndexTGIwomenWorld Wide Worx

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