e-Commerce is one of the fastest evolving industries in the world. The growth has been unprecedented, and in Africa the appetite for online business and retailing is higher than ever. In 2021, retail e-commerce sales amounted to approximately 5.2 trillion U.S. dollars worldwide. This figure is forecast to grow by 56% over the next few years, reaching about 8.1 trillion dollars by 2026.
But, what insights are there from those on the ground? How are companies keeping up, in South Africa and beyond? Here’s what PayPal, One Day Only, Jumia, WorldPay and Bob Group have to say:
Two Thirds of Businesses Now Offer Online Payment Methods: PayPal
In recent research conducted by PayPal, the company has found that online shopping is well-entrenched with local consumers, and that customers are comfortable with the payment options on offer. In response to this, 64% of businesses have introduced more online payment methods, enabling more customers to pay via various methods. Another 22% intend to introduce more methods.
This speaks to the maturing of the sector and businesses’ drive to provide their customers with the payment methods they prefer. Accepting orders through online shopping carts has had an overall business impact on 71% of responding businesses, showing the power of automation that e-commerce platforms can provide.
Cyber Security is at the Top of the List: Worldpay
This is not a new threat for payment operations. But with the increase in global internet penetration and the explosion of digital information, the scale and sophistication of fraudulent attacks has also increased. Given the gravity of the problem, it’s unsurprising that fraud detection is a critical requirement for B2B and e-commerce payment offerings at Worldpay.
Combining fraud protection and seamless consumer experiences is crucial as nothing deters customers more from closing a transaction like complex security protocols.
But new technologies including AI and machine learning are helping to alleviate this problem.
Customers Are the Real Boss: One Day Only
Customer Operations Specialist of One Day Only, Dave Hobbs says “customer is king. Forget managers, supervisory, team leaders and directors! Customers pay our salaries and dictate whether or not our business is a failure or a success. Winning them over is crucial and we’ve never been in a more competitive space.”
One Day Only has recognised the significance that the customer role plays in the company and has redefined the customer experience by offering WhatsApp as a primary means of communication to streamline the customer experience.
Delivery is Exponentially More Expensive Across Africa: Jumia
Infrastructure, and the lack thereof, plays the biggest role in delivery and logistics on the African continent. 34% of the African population has access to paved roads, in comparison to 50% in Asia and 67% in Latin America. This is one of the greatest hindrances to logistics and delivery for the e-commerce industry and directly impacts remote and rural consumers who do not have access to the products that they are wanting to consume.
The cost of delivery in Africa is therefore one of the highest in the world. In the US delivery accounts for 53% of the total spend, while in Africa, it is as high as 67% for last mile delivery.
The Rapid Growth from COVID-19 has Subsided: Bob Group
Andy Higgins, Managing Director of Bob Group states that although there is an annual increase of around 30% in e-commerce transactions in South Africa over the past 3 years, the boom from COVID-19 has slowed. “We saw a spike during the pandemic but we have also now seen this mostly revert back to the long-term growth trend from before COVID-19. We have seen an increase in adoption from traditional brick and mortar merchants taking the online channel more seriously. Africa continues to lag behind most other countries when it comes to e-commerce adoption (both first and third world countries.)”
As the e-commerce industry undergoes rapid expansion, businesses must be proactive and adapt to changing consumer behaviours and trends. With an increasing emphasis on sustainability, the continued growth of mobile commerce, rising interest in personalisation, emergence of new payment methods, and expanding use of AI and automation, it’s crucial to stay informed and ahead of the curve.