South Africa’s online retail turnover is forecast to surpass 130 billion rand ($7.42 billion) this year, accounting for 10% of total retail sales. A new study attributes the surge to on-demand grocery shopping, strong growth in fashion, and the growing presence of international competitors such as Amazon.

The study, released on Thursday by World Wide Worx in partnership with Mastercard, Peach Payments, and Ask Afrika, shows online retail sales jumped by 35% in 2024 to reach 96 billion rand. This figure represented around 8% of all retail trade in the country.

Grocery remains the fastest-growing segment, boosted by the success of on-demand shopping apps launched by major players such as Shoprite, Pick n Pay, and Woolworths. Fashion retail has also gained traction, with retailers improving digital platforms through better size guidance, user-friendly websites, and streamlined shopping experiences.

Arthur Goldstuck, CEO of research firm World Wide Worx, emphasized the shift in consumer behavior.

“Online retail has moved from being an experiment on the margins to a structural force in the economy. Nearly one in every 10 rand spent at retail will now be online.”
Arthur Goldstuck

Global Competitors Redefine South Africa’s E-Commerce

Amazon’s entry into the South African market in 2024 accelerated competition, with the U.S. retailer now used by 12.3% of online shoppers. It trails behind fast-fashion giants Shein and Temu, which together hold 15.3% of the market, but remains second to Takealot, the local leader with 31.9% of online shoppers.

Shein and Temu experienced rapid growth between 2023 and 2024, achieving turnover of 7.3 billion rand and nearly 40% of online clothing sales last year. However, stricter customs enforcement, the closure of tax loopholes, and the resilience of South African retailers have since tempered their momentum.

Goldstuck noted: “Their growth is now expected to slow, suggesting coexistence with, rather than displacement of, established players.”

South Africa’s digital retail boom has been underpinned by expanding internet penetration, increased smartphone usage, and shifting consumer habits. The COVID-19 pandemic played a pivotal role, forcing many shoppers to embrace digital platforms during lockdowns for both safety and convenience.

Local champions like Takealot remain strong, but international brands continue to reshape the landscape. For consumers, factors such as convenience, product variety, and competitive pricing remain central to purchasing decisions.

Infrastructure And Trust Remain Key Challenges

Despite the impressive growth, challenges continue to restrict e-commerce potential. Limited logistics infrastructure, especially outside major cities, hampers delivery speed and coverage. This often impacts customer satisfaction, particularly in rural and remote areas.

Payment trust also remains an issue for some shoppers. While mobile banking and digital wallets are gaining popularity, segments of the population remain hesitant due to fraud risks. Broader economic inequalities further limit access, as many households still lack reliable internet or the disposable income required for regular online purchases.

Retailers are adapting by embracing omnichannel strategies, blending digital shopping with in-store experiences to capture a wider consumer base. Investments in artificial intelligence, personalized recommendations, and localized services are setting the tone for future expansion.

At the same time, government initiatives to expand broadband access and support small and medium-sized enterprises in e-commerce offer hope for more inclusive growth. By reducing barriers to digital entry, these programs aim to give both consumers and retailers a stake in the online economy.

Looking ahead, South Africa’s online retail sector reflects both vast opportunity and enduring challenges. With innovation, infrastructure improvements, and balanced competition between local and global players, the digital marketplace is expected to play a central role in the nation’s economic recovery and transformation.