A snapshot overview of the South African E-commerce landscape in July 2013.

1. THE SOUTH AFRICAN
E-COMMERCE LANDSCAPE
A Snapshot, Aug 2013

2. • South Africa has been comparatively slow to embrace the
internet and e-commerce in general
• Historical factors behind this have been limited disposable
income, poor internet infrastructure (broadband penetration),
expensive data, expensive hardware & low trust in e-
commerce fulfillment
• Geo-demographically we have not suited ecommerce (large
land mass, with poor logistics infrastructure)
• All of the above factors are moving in the right direction:
increasing, cheaper broadband penetration, rapid increase in
smart mobile devices, more trust in e-commerce
• All indicators is that this will improve both steadily and
exponentially in years to come
Historically Weak

3. • 13-15 million with online access (approx. 37% penetration)
• High correlation between internet access and high disposable
income
• Dense population of active online buyers in Gauteng &
Western Cape
• Daily deals sites woke us up to online transactions 2 years
ago
• Mobile penetration is large and growing
• Home products are growing (dionwired, hirschs, yuppiechef,
5Rooms)
• Facebook is by far the most dominant social media platform
Getting Stronger

5. Dominant local players
Kalahari – general
merchandise
Groupon
Bid or buy – general merch
Takealot – general merch
OLX (classifieds)
Zando (fashion)
1. Yuppiechef (kitchen, home & garden)
2. 5 Rooms (décor & garden)
3. Gumtree (classifieds)
4. Pricecheck (price comparison portal)
5. Wantitall (general merch)
6. Citymob (curated flash sales)
7. DionWired (appliances & electronics)
8. Woolworths (bricks and clicks
department store)
9. Mr Price (bricks and clicks apparel
retailer)
10. Loot - GM
11. Vuvuplaza (group buying)
Also worth looking at
SA eCommerce Companies

6. Who owns who

7. Who owns who
Also own
tencent and
mail.ru hence
the very long
pockets. Can
burn through
cash.

8. Who owns who
New York
based
investment
fund. Also
have shares in
many other big
name global
tech players.

9. Who owns who
Rocket (Oliver
Samwer & bros.)
grew Groupon
globally and are
known for
aggressively
cloning known US
based internet biz
models before
exiting and
moving on .

10. Who owns who
So most of the large and ‘successful’ ecommerce brands in South
African are not making a profit. They have invested huge amounts
of money in brand building, technology, operating costs and
people but may never be profitable. If they manage to take a very
long view however they should enter the black over time.
Most profitable ecomm co’s to to date would appear to be Groupon,
Vuvuplaza, BidOrBuy, OLX & local independent yuppiechef.
Reasons for profitability: Groupon & Vuvuplaza sweat other
companies assets + did not require too much investment deep
tech or inventory to succeed . The classifieds model (BoB & OLX
are zero inventory co’s). Yuppiechef was bootstrapped between
friends and grew organically over time.

11. Some Key People
Oliver Rippel
Andy Higgins – bidorbuy
founder and current CEO of
uAfrica.
Kim Reid – Takelot CEO.
Ex-Naspers/MIH
Manuel Koser - Zando
Emelian Popa – 5Rooms
Daniel Guasco & Wayne Gosling –
Groupon SA
Andre De Wet -
PriceCheck

12. 1. Google South Africa
2. Facebook
3. Google
4. YouTube
5. Yahoo
6. Gumtree
7. Wikipedia
8. LinkedIn
9. News24
10.Bid or Buy
11.Twitter
12.First National Bank
13.Blogspot
14.StandardBank South Africa
15.ABSA
16.Windows Live
17.Amazon
18.Independent Online
19.WordPress.com
20.Microsoft Corporation
TOP 20 (ALL) SITES: TRAFFIC

13. 91% of South Africans who shop online are happy
with their overall experience‚ while 76% return to
an online shopping site that they have used.
MasterCard Survey 2013 SATISFACTION

14. 79% stated that they want free or
minimal delivery or shipping charges.
MasterCard Survey 2013 EXPECTATIONS

15. The most crucial consideration, indicated
by 90% of respondents, was secure
payment facilities and convenient payment
methods.
MasterCard Survey 2013 EXPECTATIONS

16. Only 29% of online consumers' purchase
occasions came from foreign websites‚ a
5% decline compared to the previous
survey.
MasterCard Survey 2013 LOCAL V. FOREIGN

17. Websites selling books, CDs and DVDs
were the most popular, with 42% of
respondents having visited these sites in
the last three months. Home appliances
and electronics took second place (35%).
MasterCard Survey 2013 WHAT PRODUCTS?

18. 13m people online
4.6m have been online for five or
more years and are comfortable
shopping.
By 2018 Goldstuck calculates there
will be 18.4m people online and of
these 13.2m will have the propensity
to shop.
MasterCard Survey 2013 KEY NUMBERS

19. Online retail revenue has grown from
R2.6bn in 2011 to R3.3bn in 2012 and is
expected to hit R4.2bn this year.
This is less than 2% of total retail in SA –
but at this rate of growth local retailers are
beginning to take note.
MasterCard Survey 2013 TOTAL MARKET SIZE

24. SOCIAL MEDIA TOP BRANDS

25. TOP MEDIA BRANDS ON FACEBOOK

26. patrick@uxfoundry.co.za