Average shopping basket for online shoppers in SA is R803

Supermarkets, books and charities saw big increases in transactions

04 November 2020 - 08:03
South Africans have embraced online shopping during the Covid-19 pandemic and lockdown. File photo.
South Africans have embraced online shopping during the Covid-19 pandemic and lockdown. File photo.
Image: 123RF/ GUI YONGNIAN

The lowest online transaction to date for 2020 was for R1 and the highest was R850,000, with R803 the average basket size, says online payment gateway PayFast. 

“We saw a 100% increase in online transactions between April and May 2020," said Jonathan Smit, managing director and founder of PayFast. 

Its e-Commerce Performance Index report consists of industry, payment and buyer data sourced from PayFast platforms over the past year. The analysis demonstrates the impact of the Covid-19 pandemic on e-commerce from the perspective of merchants and consumers.  

“The pandemic forced businesses to shift to digital or face shutting down. Around 60% of merchants noted a shift in sales from physical outlets to online stores since March, with 42% reporting an increase in revenue over lockdown,” said Smit. 

According to their data, Gauteng was the province with the highest sales and Northern Cape the lowest with 1%. 

Smit said since the start of the lockdown in March, PayFast had registered more than 25,000 new merchants, far surpassing any previous peak periods for business registrations.  

“For many businesses that had previously relied on selling their products or services in person, accepting online payments has been a significant help in digitising their offering. Many of these new registrations are also entrepreneurs who finally took the plunge to open their e-commerce businesses during lockdown,” he said.

Gareth Burge, head of sales and marketing for digital credit facility provider Mobicred, trust in online payments for the age group above 60 has grown. 

Mobicred grew by as much as 50% year-on-year by September 2020.  

“This was spurred by the rapid adoption of online shopping by local consumers looking for alternative online payment methods which catered to their security needs,” Burge said.  

Their data shows the average purchase size increased by 25% and frequency of shopping online by more than 30% during lockdown.  

“The stay-at-home economy presented an opportunity for businesses to refine their online shopping journey to compete with traditional brick and mortar stores. This trend will continue. To capitalise on the shift to e-commerce, retailers will need to streamline the customer’s online shopping journey as much as possible,” Burge said .  

With a 90% increase in users compared to the same period in 2019, SA's fastest growing age group of customers signing up for a Mobicred credit facility are over 60.  

“This age group has previously been uncomfortable shopping online, but we often find that once a person has overcome the initial hesitation of making an online payment, they’ll become returning online shoppers. Such is the case with this age group,” Burge added. 

Shopping trends

Contactless payments has also been a trend of the Covid-19 lockdown retail landscape, notes Standard Bank.

"South Africans were asked to stay at home between April and September 2020, and this sudden change in circumstance was mirrored by changes in the way consumers spent their money. Over the six-month period, 20% of all credit card transactions by Standard Bank customers were done online, while 17% were contactless payments (against a 7% baseline pre-lockdown), meaning the purchases were made using tap-to-pay or via a mobile device," the bank said.

Contactless payments have continued to rise month on month and this is expected to continue.

“We witnessed a dramatic shift in behaviour around payments during the lockdown period. With concerns over Covid-19, consumers opted to make payments via online banking and our mobile app banking or by using the tap-to-pay functionality,” said Ethel Nyembe, head of card and payments at Standard Bank.

Standard Bank’s data also showed there was an 84% increase in the value of online spend at supermarkets and grocery stores year-on-year (y/y), while the increase in value of spend at online general merchandise stores increased by 458% y/y. Contactless spend at petrol stations increased by 608% y/y, by 179% y/y at wholesalers, and 137% y/y at supermarkets and grocery stores.

Retailers that experienced a boom in online purchases over the six months include book stores up 292% y/y and clothing and accessory stores up 103% y/y.

There was also an increase in the percentage of charitable donations made, which was up 56% y/y.

Point of sale spend increased by 30% y/y at grocery stores and supermarkets, 25% y/y at hardware stores, 30% y/y at computer and electrical stores, and 34% y/y at nurseries and florists.

Spending was down 7% y/y at barbers and hair salons, 42% y/y at watch and jewellery stores, 10% y/y at clothing and accessories stories and 79% y/y on local travel, including airlines hotels, car rentals and travel agencies.

TimesLIVE


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