Online shopping is growing at a healthy pace, with the only constraints among Internet users being experience, access and disposable income.
Products that are enjoying the fastest growth in the online space are airline tickets, coupons and other virtual products, according to World Wide Worx MD Arthur Goldstuck, presenting the findings of the latest MasterCard Worldwide Online Shopping Survey this morning.
Retailers entering the online world need to be aware that they are competing in a global marketplace, Goldstuck adds.
The MasterCard survey shows that online shopping has increased significantly in South Africa and continues to show potential for growth, with price, convenience and security key factors to consider making a purchasing decision.
The survey revealed that the number of South Africans shopping online has steadily increased over the past two years, with 58% of respondents in a survey of active Internet users saying that they use the Internet for shopping. This is an increase from the 53% that said that they shop online in 2010, and the 44% that gave the same answer in 2009.
When choosing an online retailer from where to make their purchases, the majority of respondents cited lower prices (91%), payment convenience (90%) and secure payment facilities (90%) as their main motivators for doing so. They also said that websites should have a good reputation, be user-friendly, and that the online retail provider of choice should offer low or no extra charges for delivery.
“The numbers speak for themselves,” says Anna Jones, GM: South Africa at MasterCard Worldwide. “The latest MasterCard survey found that among those shopping online, a majority 89% of respondents are satisfied with their overall online shopping experience, with 73% likely to make a purchase in the next six months. While these responses have remained static since last year, they show that the level of satisfaction has remained consistent as the number of online shoppers has grown.”
The survey, which serves as a benchmark that measures consumers’ propensity to shop online, was conducted across 25 markets between 5 December 2011 and 6 January 2012. The South African report surveyed banked consumers who access the Internet at least once a week. They were asked questions about their online shopping habits. The survey and its accompanying reports do not represent MasterCard’s financial performance.
“The findings back up our research into the way online shopping evolves,” says Goldstuck. “We have shown that, once people are experienced Internet users and go online regularly, their propensity to shop online increases dramatically. The key is to convert that propensity into shopping behaviour, and this survey pinpoints where and why that conversion is happening.”
South Africans who shop online do so because they find it convenient and easy, and that the wide range of goods available is appealing. They also look to online portals to research purchases they are planning on making with 78% of online shoppers saying that they look at online reviews before they purchase, while 73% said that they investigate online reviews of the retailer themselves before making a purchase. In a show of confidence for the online retail environment, 74% of respondents said that they would return to an online retailer from which they had already made a purchase.
Among the most popular purchases made online were products and services related to coupon/deal sites, online gaming, applications, music downloads and tickets to arts or music events.
Ninety-five percent of respondents mentioned that they had visited deal or coupon websites, which have made a noisy entrance onto the local online environment since the last survey was conducted. One quarter of visits to these sites ended in the purchase of a deal.
“This shows how the online world can work in tandem with the bricks-and-mortar environment, with online spend driving spend with conventional outlets,” says Goldstuck. “Many people now conduct product research online before making a purchase in-store. Retailers that avoid the virtual option for fear of cannibalisation of customers are in fact missing out on a powerful driver of traffic through their physical stores.”
The research also revealed increases in the number of people who are shopping online (versus offline) for travel purposes: 87% of respondents (up 10% from 2010) have made purchases from airlines and 71% (up 9% from 2010) have made hotel bookings online in the last three months.
On the opposite side of the coin, South Africans revealed that they prefer not to shop online for their groceries, with only 9% making this their first choice to avoid the chore of grocery shopping. This is a decrease to the previous survey’s result of 27%, showing a18% decline.
“We’ve also found that online grocery shopping has declined , mainly because people want to choose fresh products personally, delivery schedules are too inflexible and too many mistakes are made by in-store stock pickers,” says Goldstuck.
When it comes to paying for online purchases, the majority of respondents (84%) use payment cards or EFTs or a combination thereof. Encouragingly, security is less of an issue than it has been in the past years with 38% of respondents saying that they are not convinced that the medium is safe. This is down from 47% in the last survey, which itself was a drop from the 59% of the 2009 results.
Goldstuck adds that next year should be an inflexion point for online shopping, when the number of experienced Internet users – those who have been online for five years – increases steeply and many more people delve into e-commerce for the first time.
He warns, however, that mobile commerce may take longer to become mainstream. Although a majority of Internet users also access a browser via their mobile phones, only 11% to 12% of them are using these devices for buying goods other than airtime.