South African e-commerce is a COVID-fired market of risk and reward

Like many of her compatriots, Kubashnee Moodley made her first foray into online shopping during South Africa’s coronavirus lockdown. She is not a satisfied customer.

The 42-year-old business management coach was once charged for a parcel she never received and also had groceries delivered to her Johannesburg home after dark. “I was not going to risk going to the gate … especially with crime so high,” she said.

Moodley’s experience encapsulates the challenging situation facing the e-commerce sector in Africa’s most advanced economy.

Having long lagged behind much of the world in terms of e-commerce, South African retailers and delivery start-ups have been doing a roaring trade online as consumers shy away from shops during the COVID-19 pandemic, with the likes of Pick n Pay, Checkers and OneDayOnly experiencing an explosion in demand.

But this post-COVID boom is straining the capacity of even the largest retailers, leaving some customers complaining of long wait times and poor service.

The ability to alleviate those growing pains will dictate which companies emerge as e-commerce leaders and which will be left behind.

Factors such as fear of parcel theft, online fraud and high mobile data costs have long hindered South African e-commerce growth, experts say.

Global e-commerce leviathan Amazon does not operate in the economy of 58 million consumers, partly because of the cost and challenges of setting up the required infrastructure, analysts say. And African giant Jumia only launched in South Africa this year. – reuters