Necessity brings innovation for South African retail
South Africa underwent one of the world’s most rigorous lockdowns last year. Essential goods were the only e-commerce items allowed to go on sale, and many companies were put at risk of closure. Some survived, many did not.
As a result of these circumstances, the E-Commerce Forum South Africa (EFSA) worked with the government to effectively and safely reduce the restrictions on e-commerce to help ignite the flailing economy and establish a fresh baseline for growth in a pandemic-affected world.
This saw significant innovation and shifts in approach and perspective, particularly in the e-commerce arena. Retailers adapted quickly, with big names like Checkers Sixty60 and Zulzi changing the way that groceries were bought, while Uber shifted people’s experience of public transport and the delivery of food and other essential products.
Retailers that were unable to keep up with the demand also turned to strategic partnerships. Pick ‘n Pay, for example, partnered with Bottles to introduce a same-day delivery services to its customers – a relationship that was so successful that it saw the retail giant buying the delivery service. OneCart partnered with Exclusive Books and HP to achieve the same levels of delivery efficiency.
Mobile transactions boom with expanded smartphone access
Along with the rise of app-based and online shopping experiences, there was significant growth in mobile transactions, with “tap-and go” becoming increasingly relevant as a seamless cashless payment solution.
On our platforms, PayU saw an impressive move to mobile payments during lockdown with up to 85% of transactions completed on a mobile device. This rapid increase in mobile payment usage correlates to the massive increase in smartphone penetration in South Africa. The Independent Communications Authority of South Africa (ICASA) reported in the 2020 State of the ICT Sector report that smartphone penetration has risen by 9.5% over the past year.
In addition to increased usage of mobile devices and payments, there has been a shift in how customers approach mobile payment platforms. They want tools that engender trust, that minimize the risk of fraud and theft, and that allow them to do more than just pay for online shopping.
Financial inclusion creates opportunity – for merchants and consumers alike
Changes in consumer attitudes are also changing access to financial services and solutions. From the micro enterprise to the corporate building foundations in a rural community, digital payments offer people access to banking services and cash management tools that previously would have been out of their reach.
The more people gain access to digital financial tools that are secure and affordable, the more they are empowered to grow, reach new markets, and improve their financial acumen. Digital payments are tearing down barriers to financial inclusion and giving SMEs and communities improved opportunities for growth.