Wednesday sees the release of new research that appears to place a huge stop sign in the road to online retail. The annual MasterCard Online Shopping Behaviour Study reveals that the proportion of highly active internet users in South Africa that are shopping online has fallen for a second year in a row.
At the end of 2013, only 51.6% of these users were shopping online, compared to 54% in 2012 and 57.9% in 2011. What’s happening here? After all, World Wide Worx research shows that online shopping is growing at more than 30% a year, and the figure is confirmed by most of the major online retailers.
The secret lies in the manic growth we are seeing in the number of highly active internet users. In 2012, according to World Wide Worx data, that number was at 3.9-million. In 2013, it leaped to 4.6-million. The 54% of 3.9-million users in 2012 amounted to 2.1-million shoppers. At the end of 2013, 51.6% of 4.6-million users gives us 2.37-million people shopping online in South Africa.
This means that half the people who are ready to shop online are not doing so. Their reasons are laid bare in the MasterCard research: of those not shopping online, 42% say they are not sure making transactions online is secure or safe. That’s up from 38% a year ago, but the proportionate increase also comes off the back of that big increase in the total pie. It translates into a rise from about 1.4-million to 1.9-million in the number people who could have been shopping online but are scared off.
About a quarter of respondents say they are concerned about being able to exchange or return goods, while a similar proportion are worried about time taken for deliveries.
All of these responses add up to lack of confidence in the online medium as a retail channel. Considering that more than half of those who don't shop on line say they prefer the physical store experience, it is clear that the advantages of online shopping have not made enough of an impact to overcome the negatives.
In the past, it was easy to blame lack of internet access and poor broadband, but those have become only excuses, as the South African internet user base passes the 14-million mark and heads, in the next few years, for the magical figure of one-third of the population using the internet.
Given that close to 1 in 10 South Africans is now an experienced internet user, but only 1 in 20 is shopping online, the challenge lies elsewhere. Retailers, along with financial and internet service providers, need to make a concerted effort both to educate the market, and to build its confidence in a medium that holds the promise of making all our lives easier. – Gadget.co.za.
Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee