January 27, 2011
Johannesburg, 27 January 2011 – According to the latest survey on online shopping habits from MasterCard Worldwide, 51% of South Africans who have access to the Internet are shopping online and 75% of those have done so in the past three months.
While the number of South Africans accessing the Internet to shop online is up 9% from the previous survey, the number of those who made purchases in the last three months has decreased by a marginal 2% from 77% a year ago.
The survey was conducted from 3 September to 1 October 2010 and reached 8,500 consumers from 15 markets across APMEA. The survey and its accompanying reports do not represent MasterCard financial performance.
In early 2010, South African research company World Wide Work reported that the number of South Africans with access to the Internet grew by 15% between 2009 and the beginning of 2010 from 4.6m user to 5.3m users with similar growth predicted for the remainder of 2010..
According to the latest survey by MasterCard, a majority (89% )of South African online shoppers are satisfied with their overall online shopping experience and 73% of active online shoppers intend to make an online purchase in the next six months. Both these figures have shown improvements over the previous year, where satisfaction was 83%, with the likelihood of continued online shopping at 72%.
South Africans who shop online also feel that making purchases on the Internet is more convenient, user-friendly and easier than walking into a store or ordering from a catalogue or via a call centre.
“Those who shop online are largely satisfied with their experiences with just over half of South Africa’s Internet-connected population logging on to shop online. This presents a great opportunity for MasterCard to leverage on this Internet revolution to bring more people into the online shopping fray,” says Dougie Henderson, VP Product Delivery, MasterCard Worldwide in the Middle East & Africa
The survey revealed that more people are making use of broadband access technologies. ADSL usage has increased from 55% to 60% while 3G/HSDPA usage increased from 49% to 63%.
Conversely, the number of users who said that they utilise dial-up dropped substantially from 16% in 2009 to just 6% in 2010.
Interestingly, respondents who said they use their mobile phones to access the Internet has shown significant growth, climbing from 13% in 2009 to 39% in 2010 – which is the highest score for mobile phone Internet usage across the APMEA region. Singapore follows at 33%, India (25%), Malaysia (20%), Thailand (20%), and UAE (20%)
This corresponds with extensive changes and upgrades that have been apparent in the South African mobile broadband market throughout much of 2009 and 2010, including increased price competition between the cellular operators, vastly upgraded networks and the growth in smart phones as a handset category.
This is according to a research study released by World Wide Worx, which revealed that three quarters of South African companies have deployed smart phones within their organisations, compared to almost none two years ago.
That said, MasterCard survey found that just 11% of online shoppers actually made purchases using their mobile phones and only 13% intend on doing so in the next six months.
When asked for what purposes respondents accessed the Internet, sending or receiving e-mail (95%) topped the list, followed by browsing for materials for study purposes (74%), checking their bank balance (73%), browsing for leisure (73%) and reading the news (70%). Online shopping was cited by 51% of users.
According to the latest MasterCard survey, South African online shoppers prefer to plan and research their online purchases in advance, and fewer people are making impulse purchases online. The number of online impulse shoppers dropped substantially from 22% to just 8%.
The majority of those shopping online (84%) conduct research about their purchases on the Internet before buying, 69% use the merchant or company’s website for their research and 57% speak to family or friends beforehand.
CDs and DVDs are still what South Africa’s online shoppers seek out most on the Web with 50% citing so. Closely following CDs and DVDs is the purchase of books and art by 45% of respondents. Airline tickets saw a 1% decline to 43% of online purchases, while movie/concert tickets shot past home appliances and electronics to tie third place with 43%. Home appliances and electronics dropped a substantial 14% to just 29% of online purchases from last year’s level of 43%.
When it comes to payment for online purchases, credit cards are the most widely-preferred payment method online with just under half of the respondents (48%) using this payment method. Paying using a debit card (29%) is the second most preferred payment method.
Increasing from 2% to 11%, PayPal leapfrogged electronic transfers for the third most popular online payment method, corresponding with the service’s launch in South Africa in 2010. Electronic transfers declined from 10% to just 4% in 2010.
According to 55% of the respondents not shopping online, the number one reason was that they prefer to shop in-store in order to look at the physical product.
Encouragingly, fears about online safety and security have decreased substantially, dropping to second position from 63% in 2009 to 51% in 2010, while 44% of respondents reported not having a credit card as their reason for not shopping online.
Interestingly, there was a significant jump from 24% to 41% in the number of respondents who cited “additional administration and delivery charges” as their reasons for not shopping online, while there was also an increase in people who said that they did not find anything online that interested them.
South Africans who do shop online are quick to offer advice on how online stores can improve their current offerings, and potentially attract new customers.
At the top of their list of recommendations were:
1. Continue to enhance payment security and improve users’ confidence in online transactions,
2. Don’t charge additional service charges on purchases and
3. Make websites easier to use.
“Online shopping has come a long way in South Africa. Access to the Internet is becoming easier and more cost effective, the overall online shopping experience is viewed positively and people are gaining trust in online security.
“However, online retailers also need to be cognisant of the concerns of and feedback from their customers and continue to improve their offerings to further enhance the overall online shopping experience in order to attract new customers and retain existing ones.,” Henderson concludes.
- Substantial Market Growth (Emerging): According to the 2009 survey findings, consumers in the U.A.E. and Malaysia were the least likely to shop online. This year’s results reported a substantial increase among consumers accessing the Internet to shop online in both markets:
- Malaysia is up to 55% in 2010, from 33% in 2009
- U.A.E. is up to 42% in 2010, from 29% in 2009
- Stabilising Market Growth (Emerging): Markets like India and Thailand, which reported major spikes in online shopping from 2008 to 2009, are still registering relatively high numbers. However, there are signs of a slight decline or slowing growth among consumers in India and Thailand who access the Internet to shop online.
- India has dipped slightly to 67% in 2010 from 72% in 2009
- Thailand has grown incrementally to 67% in 2010 from 63% in 2009
- Slowing Market Growth (Mature): Mature markets like Australia and South Korea have reported a decline while Japan is reporting minimal growth according to consumers who access the Internet to shop:
- Australia is at 58% in 2010 from 63% in 2009
- South Korea has dropped to 85% in 2010 from 87% in 2009
- Japan is now reporting 75% from 74% in 2009
The MasterCard Worldwide Index suite in Asia/Pacific, Middle East and Africa includes the long-running MasterCard Worldwide Index of Consumer Confidence, as well as the MasterCard Worldwide Index of Women’s Advancement, Online Shopping, Index of Financial Literacy, and the Index of Global Destination Cities. In addition to the Indices, MasterCard’s research properties also include a range of consumer surveys including Ethical Spending and a series on Consumer Purchasing Priorities (covering Travel, Dining & Entertainment, Education, Money Management, Luxury and General Shopping).
MasterCard also regularly releases Insights reports providing analysis of business dynamics, financial policies and regulatory activities in the Asia/Pacific, Middle East and Africa region. Over 80 Insights reports have been produced since 2004.
MasterCard has also released a series of four books on Asian consumer insights, authored by Dr. Yuwa Hedrick-Wong, Global Economic Advisor for MasterCard Worldwide and published by John Wiley & Sons.
MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews, join the discussion on the Cashless Conversations Blog and subscribe for the latest news.