Articles | Marketing and Sales

Selling Online in South Africa

So you have decided to embark on the journey of starting an Online Business in South Africa. Well it has never been a better time! 

eCommerce in South Africa is at an all time growth peak meaning more people are buying online than ever before. For the true entrepreneurs this means a tremendous opportunity awaits. 

Selling Online in South Africa
Selling Online in South Africa 2

According to Statista:

Revenue in the eCommerce market is projected to reach US$4,608m in 2021.

Revenue is expected to show an annual growth rate (CAGR 2021-2025) of 8.16%, resulting in a projected market volume of US$6,305m by 2025.

The market’s largest segment is Fashion with a projected market volume of US$1,481m in 2021.

User penetration will be 41.1% in 2021 and is expected to hit 53.1% by 2025.

The average revenue per user (ARPU) is expected to amount to US$186.58.

https://www.statista.com/outlook/dmo/ecommerce/south-africa

Things to consider:

Yes, eCommerce in South Africa is growing at an incredible pace and the market keeps expanding, however this does not mean that it is the same market that exists in other developed countries. 

  • The South African eCommerce market penetration does not reach to rural or undeveloped areas within the country. 
  • People are slowly getting used to new technologies and developing trust in online shopping. 
  • Logistical infrastructure is nowhere near that of developed countries although it is constantly improving and becoming more competitive. 

As far as product segmentation, stats show that the variety of items being bought online is ever expanding. 

The opportunity:

  • You have a potential opportunity to be the first within a particular product or service category in a fast paced developing market. 
  • You have a potential opportunity to establish a well known brand before competition and barriers to entry become too intense. 

Barriers to entry are in general extremely low in eCommerce, especially when starting out. 

As an example:

An eCommerce store can be easily set up by making use of online resources. The only upfront cost would be hosting at an average rate R100 per month. Free tools and resources online can also be used for tasks such as graphic design and social media marketing. 

The key to success is to know your customers, provide exceptional value with your product or service and market in a relatable way to your audience.

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