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PayPal: South Africans will spend over $2.9 billion online this year

September 6, 2018 • Finance, Retail, Southern Africa, Top Stories

South Africans will spend over R45 billion online this year, with over 60% making a purchase from an overseas retailer

PayPal: South Africans will spend over R45 billion online this year (Image from mashable.com)

South Africans will spend over R45 billion ($2.9 billion) online this year, with over 60% making a purchase from an overseas retailer

PayPal and Ipsos today released their fourth annual cross-border eCommerce report. Interviews were conducted earlier this year. Understanding the global eCommerce revolution, the company conducted a global, 31 market survey that examined 34 052 consumers’ online and cross-border shopping behaviours.

Online shopping continues to rise in South Africa

The research shows that online shopping and eCommerce are on a steady rise. 69% of active online adults shopped online in the past 12 months, bringing the total estimated spend in 2018 to R45.3 billion, showcasing a 19% increase from 2017.

Online shopping is expected to increase even more over the next 24 months, with a forecasted total spend of R61.9 Billion in 2020, which will showcase a 36% increase from 2018. The reason – 75% of adults interviewed indicated the convenience of shopping online.

“Advances in technology, such as mobile technology and access to data, have made it easier for South Africans to shop online,” commented Efi Dahan, General Manager for PayPal Eastern Europe, Middle East, and Africa.

The three most popular online shopping categories for South African consumers who shop online were Clothing/Apparel (53%), Entertainment/Education (digital/downloadable) (51%) and Event tickets (51%).

South Africans shop global

62% of South African online shoppers purchased something from an overseas retailer in the last 12 months, compared to 43% in the previous year. Clothing/apparel, footwear, and accessories came in as the most common cross-border purchase (68%) with jewellery/watches (62%) second most popular and consumer electronics, computers/tablets/mobiles and peripherals being the third purchase of choice (54%).

“South African online shoppers have realised that buying from overseas is not the hassle it once was, and that they can purchase must-have items, often at a better price,” adds Dahan.

South African online shoppers purchasing from overseas chose the U.S. as their online shopping destination of choice (34%) due to better prices, availability and variety of styles, followed by China (28%) and the UK (16%). The research also indicated that Christmas, Black Friday and Seasonal Sales are the three top occasions for shopping cross-border more frequently than usual.

Mobile driving growth in online shopping

The convenience of shopping with a mobile phone is changing the way South Africans approach eCommerce. The research indicated that 62% of online shoppers have used their mobile device for their purchases, resulting in an estimated R14.9 Billion spend in 2018. This is estimated to grow to R30.4 Billion by 2020, doubling in value from 2018.

“Mobile technology is transforming eCommerce in Africa, and consumers are more likely to have a mobile device than a bank account,” continued Dahan. “South Africans are becoming more comfortable with mobile shopping due to easy-to-use apps for ordering car rides or food becoming commonplace.”

PayPal solutions to online shopping concerns

One of PayPal’s key goals is making it as easy as possible for consumers to reap the benefits of global eCommerce. Over 30% of online shoppers are concerned that they may not receive their purchased item when shopping cross-border, and 24% about a difficult returns process. Consumers that choose PayPal as their payment method of choice can address this concern through PayPal’s Buyer Protection or Refunded Returns offering which can be applied to eligible purchases.

In addition to this, 24% of online shoppers have concerns about identity theft and fraud, as well as the security of their financial details when shopping domestically. PayPal addresses this through a variety of security measures that mean financial details are not shared with merchants and that if there are any problems with your online shopping experience, PayPal can help you make it right.

Because of these measures, 69% of survey respondents indicated that PayPal is their most trusted digital payment method of choice for shopping cross-border.

“Through our research, it’s clear that the online shopping industry is growing and is set to grow even more in the coming years. It is also clear that consumers will choose online payment partners they can trust, and that provide peace of mind that the security of their financial information will be a priority,” concluded Dahan.

For the past four years, PayPal has shown a commitment to understanding the online shopping behaviours of consumers across the globe. Click here to view the global research for this study.

Edited by Daniëlle Kruger
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