E-commerce spend on SA phones to jump by 70%

E-commerce spend on SA phones to jump by 70%

Feb 23, 2016

E-commerce spending by South Africans via their mobile devices is set to grow by 70% in 2016, says a survey.

According to research organisation Ipsos, this figure is set to outpace overall e-commerce spend in SA which is forecast to grow by 29% this year.

E-commerce spending via mobiles accounted for 25% or R7-billion of all online transactions in 2015, says Efi Dahan, the Africa and Israel regional director for PayPal. Payment service PayPal commissioned the Ipsos survey.

The survey further reported that South African shoppers spent R28,8-billion online in 2015, which is expected to grow to R46-billion by 2017, of which mobile will account for R19-billion.

“There is no doubt that the rapid penetration of smartphones in South Africa will continue to be the driving force of online shopping in the upcoming years,” says Dahan.

Most South African online shoppers (59%) buy locally, with 37% buying both local and cross border and 5% buying exclusively from international providers.

The most popular online shopping destinations for locals are the US, UK and China, but Dahan warned that security was a challenge.

“I believe that the smartphone shopping experience will continue to evolve as consumers feel greater comfort and security.”

Security firm Trend Micro recently reported that hacked PayPal accounts with a guaranteed balance of $500 (R7 941.54) were traded for $6.43 (R102.51) on the Deep Web.

And Check Point reported that giant e-commerce platform eBay had failed to fix a security flaw dubbed “JSF**k” that allows cyber-crooks to use the platform as a phishing and malware distribution platform.

Dahan says that the online space made geographical borders irrelevant.

“Though international shopping is still less popular locally, with the growing variety of products, larger range of prices, improved shipping options and increasing confidence in e-commerce, we believe that South African consumers will continue to purchase online, regardless of physical borders.”

PayPal is the most popular online payment method for South Africans who shop internationally at 68%, followed by Visa Credit card at 37%, the survey showed.

By Duncan Alfreds for Fin24