Steve Whitford
Steve Whitford

Online retail taking off

Last week World Wide Worx released its online retail report which showed that online retail is growing by about 30% every year and will grow by about 40% in 2011 according to industry expectations.

I’ve had a chance to see the full report as I am doing some work for a client in the industry and the 174-page whopper makes for great reading.

I don’t want to give away too much as its Arthur Goldstuck’s business and he makes good money from it but here are some observations.

As Arthur says in his press release: “Last year there were 3.6 million people who had been online for five years or more. By 2015, that figure will be 6.8 million — almost double the potential e-commerce market of today.”

What’s exciting for me about online retail is that about 1 million people bought goods online in 2010 according to the report. This means that about 30% of experienced online users bought things online in 2010.

This is significant. It means that online shopping is becoming accepted among average South African users. It’s also interesting that half of the online shoppers have children, which means that purchasing online will start to make its way into the fabric of South African households.

With online shopping turning more than R2 billion in 2010, online retail is becoming big enough to support more staff, more investment into business and therefore a much better experience for online shoppers. This is being evidenced by the facelift many online retail sites are getting and the introduction of new technology.

Online retail sites are also getting more into social media. For example Loot.co.za has 9 000 followers on Facebook and Kalahari.net has 18 000 followers.

Arthur writes a piece at the end of the report on the experience curve in South Africa and how it applies to online retail. It’s a brilliant piece.

Basically when people have been online for five years, their internet usage sky rockets. And with that group of people becoming a bigger part of the internet population, internet usage and online retail looks set for a serious wave, which will have a big impact on South Africa.

With more people actively using the internet, it opens up the possibility for businesses to capitalise on the online space in a way internet junkies like me always dreamed about. I first accessed the internet in 1994 as one a few thousand people to do so and I’ve been longing for days like this pretty much since then.

The next two years are going to be key for the internet space. Let’s hope South African businesses rise to the opportunity and we as internet users reap the rewards.