Article provided by PayFast
South Africa’s retail sector has entered the age of e-commerce, with total online retail sales expected to reach R42-billion by the end of 2021. From the rise of contactless payments to the boom in social commerce, the pandemic has significantly altered consumer expectations when it comes to making purchases online. To unpack the major trends in the digital retail industry and explore the legacy of COVID-19, online payment gateway PayFast has launched their second annual e-commerce performance (PEP) index.
“We saw a 178% increase in QR code payments, and a 55% growth in mobile usage for online shopping over 2021. This indicates that the habits picked up by consumers during hard lockdown are here to stay,” says Colleen Harrison, Head of Marketing at PayFast; “This year’s index analyses the long-term impact of the pandemic on consumer behaviour, and offers extensive insight into the e-commerce landscape heading into 2022.”
The report features insight from a selection of PayFast’s expert partners, including Mastercard, SnapScan, TymeBank, Ecwid, Xero, and Retail Capital, as well as key industry, payment and buyer data sourced from PayFast platforms over the past year.
“One of the key takeaways of this year’s PEP Index is that payment innovation is removing barriers for consumers to transact online, allowing more people to participate in the growing digital economy,” says Harrison.
Over the course of 2021, South Africa’s retail industry has adapted to constantly changing lockdown restrictions, and ever-evolving customer experience requirements. To understand the impact on local e-commerce businesses, PayFast conducted a survey across their merchant database. “Despite a difficult year, 48% of merchants saw an increase in revenue, spurred on by a 50% increase in online sales. This highlights the importance of meeting customers where they are – online,” says Harrison.
In particular, social commerce is being recognised as a crucial tool for business growth – from making sales to building consumer trust. Among PayFast’s merchants, 52% are already selling goods or services directly within a social media platform, and 70% make use of multi-vendor marketplaces. Of these, 92% use Facebook, and 76% use Instagram.
With Black Friday and Cyber Monday on the horizon, businesses gearing up for the biggest retail event of the year can leverage data-driven insights to plan a successful strategy. In 2020, Black Friday fell two days after payday for most people. Despite this, sales started to increase a week before Black Friday – peaking on the day itself, as well as on Cyber Monday. The lesson to merchants is not to wait until Friday to drive sales.
“With the vaccine rollout underway, and a return to business-as-usual on the horizon, 76% of our merchants are feeling positive about the year ahead – versus 63% at the start of 2021. Considering the rate of growth, innovation, and digital adoption across the country, the future of South Africa’s e-commerce industry is something local businesses can be very excited about,” says Harrison.
The 2021 edition of the PEP Index is available for download here.