Online research report out, sales up

World Wide Worx has just released its Online Retail in SA 2011 study, which shows that online retail goods in South Africa passed the R2-billion mark in 2010 for the first time. It reached R2028-billion, growing at 30% over the previous year.

Online retailers are even more bullish about 2011, with the industry consensus pointing to 40% growth this year. This will represent the highest rate of growth for online retail in South Africa in almost a decade.

"This dramatic rise in online retail comes in the wake of an ongoing increase in the number of experienced Internet users in South Africa," says Arthur Goldstuck, MD of World Wide Worx and principal analyst for the survey. "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."

In 2010, traditional, physical retail in South Africa reached R561-billion, according to Stats SA. This means that online retail still makes up less than half a percent of total retail in South Africa, a mere 0.36%. At the same time, however, the growth rate of online retail in South Africa in 2010 was four times that of physical retail: 30% vs 7%.

Internationally, according to global online retail data analysed in the report, growth slowed in most regions during the global financial crisis, but did not turn negative: total sales never fell anywhere in the world. Industry estimates for the total value of global online retail in 2010 come to an average of about $545-billion. The figure for 2009 was $469-billion.

This indicates that, globally as in South Africa, online retail is recession-proof for now, while it still makes up a small proportion of total retail worldwide.

"This shows us that online retail growth represents not a rise in shopping activity, but rather a shift in shopping activity, from the physical space to the online space," concludes Goldstuck.