Newly-released data portrays a fascinating picture of how education, income and age are actively transforming South Africa’s online retail sector.
Online retail patterns and behaviour in South Africa continued to evolve drastically in 2022, despite the country’s ongoing recovery from lockdown restrictions and social distancing.
The findings of the ‘Online Retail in South Africa 2023‘ study, recently published by World Wide Worx and Mastercard, confirm the result of this changing behaviour, as evidenced by the observed 11 per cent increase in the country’s online shopping activity between 2020 and 2022 from 27 to 38 per cent respectively.
The study primarily derived the results from the annual Target Group Index (TGI) survey conducted by Ask Afrika, which interviews 16,000 South Africans every six months. The survey gathers data on their consumption of products, brands, and media, as well as their purchasing behaviour, attitudes, motivations and beliefs.
This index source delivers the most detailed demographic breakdown of online shopping available in the country.
Demographic drivers
Above all, the study observes that the growth in the proportion of the population’s shopping behaviours has signalled a 40 per cent increase in the total number of consumers engaging with the country’s online retail sector.
What’s more, the initial findings from the study, released at the end of 2022, coincidentally showed close to 40 per cent annual growth in total online retail spending over the past two years.
“The most revealing aspects of the new data lie in demographic differences between South Africans,” says World Wide Worx CEO, Arthur Goldstuck, principal analyst on the research project.
“The gender breakdown in particular shows that the traditional gender divide in online shopping, which was dominated by males in the early years still persists, with 41 per cent of men and 36 per cent of women shopping online,” continues Goldstuck.
The report attributes this gender divide to the frequency at which male consumers purchase electronic goods; an area it describes as a ‘traditionally male shopping domain’.
However, the fact that the biggest growth areas in online shopping in recent years have been in grocery and apparel categories, traditionally dominated by women shoppers, suggests there are other factors at work.
“These may well include elements like male control of household budgets and men being more likely to have a credit card in a household,” says Goldstuck. “It shows that outmoded societal norms die hard.”
Age analysis
The study demonstrates how the average age of online shoppers in South Africa has shifted significantly since 2020’s figures.
Online shopping ‘normalised’ across age groups during the pandemic, and at the time, all age groups up to the age of 64 had an average penetration rate of 27 to 30 per cent. Only the 65+ age group experienced a drop in online activity, sinking down to 19 per cent.
However, 2022 saw two major changes occur.
The first was that the pattern of shopping by age returned to a previously observed pattern, namely that online shopping peaked in the 25 to 34 age bracket, and then steadily dropped off with each successive age group.
The second major shift observed during the past year was in the significant drop in penetration of online shopping among the 65+ age group. This is the only age group that sees lower penetration than during the height of the pandemic.
“One conclusion that we can draw from the research is that online shopping is strongly correlated with age, but with the youngest age group constrained by lack of earning ability,” says Gabriel Swanepoel, country manager of Mastercard Southern Africa.
“A second conclusion is that the oldest age group has a strong reticence towards online shopping, which is backed up by another finding that this bracket is the most likely to still prefer in-store shopping experiences,” continues Swanepoel.
“Now, more than ever, it is crucial for retailers to understand their consumers.”
“Understand who they are, where they are, and how our country’s economics affect them. This will assist in understanding how and where to reach the targeted consumers, therefore creating a seamless consumer experience from online to in-store.”
While most age groups show a relatively high level of agreement with the statement that in-store shopping is preferable to online, 24 to 30 per cent, this figure increases dramatically to 41 per cent in the over-64 category.
No other demographic measure shows such a strong divergence in one segment regarding preference towards in-store experiences.
Parting thoughts for change
Drawing on Swanepoel’s commentary, the study shows a clear correlation between education and income in South African online shopping behaviours.
The study observes a positive correlation between education and online shopping, with the rate rising from 20 per cent for those with less than a matric qualification to 54 per cent for those with tertiary education.
Secondly, and perhaps more obviously, income rates also affected online shopping activity. In this way rising steadily from 22 per cent for those earning less than R2,500 a month to 62 per cent for those earning more than R50,000.
“The results are in effect a blueprint for online retailers, showing on the one hand where they will reach their most lucrative customers, and on the other the segments they must target to grow online retail further in South Africa,” Goldstuck concludes.
