Market Research Wrap: Online retail trends in Africa
Cheryl Hunter (research at marklives.com)’s weekly wrap of the latest market and consumer research:
- Online retail in South Africa
- Crypto- or cryptic-currency?
Retailing in Africa
World Wide Worx, Visa and Platinum Seed partnered in 2018 to deliver insights into South African digital shopping, and shoppers, with “Online Retail in SA 2019” showing that SA online shopping has grown consistently since the last survey in 2016 and is set to pass the R14bn mark this year, marking 1.4% of total retail. Lead researcher, Bradley Elliot of Platinum Seed, identifies for Market Research Wrap the top five trends that will continue to shape online retailing in Africa.
Africa is ripe for opportunity, with a growing middle class and a huge increase in smartphone penetration. It’s expected that, by 2020, half of all African adults will have a smartphone and that, by 2025, consumer spending will reach US$2.1tn.
1. Welcome to the bazaar
Wherever you go in Africa, you will find traders gathered in one place. Building on this model, African ecommerce retailers will most likely feature a multitude of traders gathered on one platform to vie for the same customers. Most Africans connect to the internet via their smartphones, so mobile-first is a priority for online retail if it’s to reach the maximum number of consumers.
2. Master delivery
Africa struggles with infrastructure, and this is a real obstacle to logistics. Innovative brands need to find smart ways to get the package delivered cost-effectively and on time. As African consumers see their overseas contemporaries getting same-day delivery, they will expect the same service.
3. Proudly African
While the west has always had a certain design allure, Africa has something else to offer that its inhabitants also value — think shweshwe materials and Mandela shirts. Fresh and vibrant designs aren’t only coming back into vogue locally; they’re also an export opportunity.
4. Caring is crucial
African customers have not always been well-treated by merchants, and this bad behaviour was tolerated due to a combination of scarcity and not knowing any better. Modern citizens won’t tolerate bad treatment, as they’re being educated by media and ‘returnees’ — people who work overseas for a period and return — reporting on conditions in the diaspora.
5. Touch me at the right point
Savvy retailers will find touchpoints that resonate with customers, using data analytics to target — but at the right time and place.
• Buy the report at onlineretail.co.za
Getting the facts
Written by Brandon de Kock, WhyFive Insights director, this fourth in a selection of interesting insights from the 2018/19 BrandMapp survey examines the results of a recent study commissioned by crypto-merchants, Luno, claiming that “29% of South Africans own cryptocurrency”.
by Brandon de Kock. While a handful of well-edited portals have included all the facts, some cut-and-paste specialists simply hung the headline out to dry without context — leaving us to believe that 29% of adult South Africans, more than 11m people, own virtual money. Where correctly reported, however, the survey was clearly positioned: conducted online, with 1000 respondents, mostly middle-class-and-up, more than 80% of whom earn at least R15 000 per month.
At that income level, National Treasury’s most-recent budget review data pegs its maximum possible universe at just less than 5m individuals. And 29% gives us 1.4m adults who’ve wagered their hard-earned cash on one of the most-volatile financial ‘instruments’ of the disruptive era. What it really means is that “[l]ess than 4% of South Africans own cryptocurrency”. That’s hardly the kind of motivational story to make you pull your life savings out of unit trusts and rush off to a virtual piggy bank.
In a similar vein to the study in question, BrandMapp aims to paint pictures of the estimated 12.5m middle-class-and-up adults living in households earning R10 000 per month or more. And here’s what the results of our 2018 survey of more than 25 000 respondents shows:
- In total, 14% of respondents ticked a box to say they’ are likely to buy cryptocurrency in the next year’. Interestingly, that percentage remains the same for the upper class, those living in R40 000+ households.
And so, bearing in mind that the 12.5m number is all adults, not just the earners, we can take 14% and arrive at a maximum number of (drumroll, please) about 1.7m potential players looking to roll the dice in the virtual currency gambling den. It’s intriguingly close to the 1.4m we got to earlier and feels like a reasonable number.
• For more, go to WhyFive Insights.
Cheryl Hunter (@cherylhunter) has written for the South African media, marketing and advertising industries for more than 15 years. A former editor of M&M in Independent Newspapers and contributor to Bizcommunity, AdFocus, AdReview and the Ad Annual, she has also produced for various television networks and currently consults on communication strategy and media liaison. She now does the new weekly “Market Research Wrap” column for MarkLives.com.
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