South Africa is experiencing an unprecedented e-commerce boom, with transaction rates peaking at higher levels than Black Friday.
After many weeks of crippling retail restrictions which formed part of the national COVID-19 lockdown in March and April, unlimited ecommerce was allowed from 15 May.
The new regulations allowed all goods to be sold through ecommerce platforms, except for alcohol and tobacco products.
South Africans flocked to online shopping sites to buy products which were not allowed to be sold during the level 5 lockdown.
Many online shopping sites saw record sales on products like gaming consoles, laptops, vacuum cleaners, treadmills and home gym equipment, and media players.
A source close to Takealot told MyBroadband the company is now generating close to R1 billion in sales per month – around double their usual volumes.
Takealot did not confirm these numbers when it was asked for comment, but other ecommerce players also told MyBroadband their sales have more than doubled in recent weeks.
Online shopping volumes have increased so rapidly that many online retailers are struggling to cope with demand.
Takealot’s distribution centres, for example, have been overwhelmed because of the increased demand. This, in turn, has resulted in deliveries being delayed.
Many other online shops have increased their expected delivery times by over a week to address logistics bottlenecks.
Big jump in payment processing – PayGate
The companies which have the best overview of online sales volumes are online payment platforms like PayGate and PayFast.
PayGate chief sales officer Brendon Williamson told MyBroadband they have seen a marked increase in transactions since unlimited ecommerce was allowed.
“On Saturday 30 May our transactions per minute increased by double our pre-lockdown average with liquor, food, and gaming being the biggest drivers,” said Williamson.
He added that they were experiencing transaction peaks four-times higher than that of Black Friday 2019.
He said lifting the restrictions on ecommerce resulted in many people using online stores to buy products they could not purchase during level 5 of the lockdown.
“We knew this would be the case and so we had always planned to scale our systems to meet the high volumes of transactions,” said Williamson.
“The reality was we had to boost capacity by 700% just to meet consumer needs in level 3.”
While the current boom in ecommerce sales is expected to subside, sales will still be higher than usual.
“While we will see some correction during June, we expect our monthly volumes for the rest of the year to settle at around 40% higher than last year,” said Williamson.
“We believe the simplicity and efficiencies of digital commerce will keep consumers coming back for more.”
Continued growth since April – PayFast
PayFast founder and MD Jonathan Smit told MyBroadband they have seen unprecedented week-on-week increases in the number of online payments made since the start of the COVID-19 lockdown.
“Following an initial dip at the beginning of April, the weekly trendline in total sales volumes shows incremental growth,” said Smit.
PayFast saw steady week-on-week growth throughout April, which continued into the first two weeks of May in anticipation of ecommerce opening up.
“Working off an already high baseline in the middle of May, total payment volumes grew by 20% in the first week after ecommerce restrictions were lifted and by another 17% the week thereafter,” said Smit.
PayFast transactions peaked in the final week of May, with another 7% growth compared to the previous week.
“The first two weeks of June have seen slight dips, which is in keeping with monthly online shopping trends that generally spike towards the end of the month when most people get paid,” he said.
Smit added that they have registered over 7,000 new merchant accounts over the lockdown period, surpassing any other high-volume period of registrations, such as the lead-up to Black Friday.