Ecommerce in South Africa has experienced significant growth in recent years. In 2023, the South African ecommerce market was valued at approximately USD 4.5 billion, with online sales expected to reach US$6.56 billion by 2024.
South Africa's relatively young and tech-savvy population, increasing mobile internet penetration, a fast-growing middle class and rising disposable incomes are factors for the disruptive rise of ecommerce.
New and emerging ecommerce businesses hold tremendous potential for growth opportunities. In this article, we’ll look at how ecommerce has changed traditional retail in South Africa and share some trending online business ideas for you to start an ecommerce business.
Are ecommerce businesses disrupting high-street retail in South Africa?
Fast fashion company Shein entered the South African ecommerce market in 2020 and is now the top retailer with a 35% market share. Temu, the global sensation, launched in South Africa in January this year and has since become the number one downloaded app among iOS and Android users.
With Amazon's much-anticipated entry into SA this year, the fate of Naspers-owned Takealot, which has been enjoying the lion's share of the ecommerce market, and other homegrown ecommerce platforms like Jumia and Kilimall remains to be seen.
South African retailers have pushed back and are lobbying the government to close an import tax loophole for small parcels of clothing. Zando, the local online fashion retailer, introduced its global ecommerce platform, Zando Global, earlier this year to promote local businesses and offer a trustworthy alternative for those seeking international products without the uncertainties of ordering from Shein or Temu.
Given the current economic climate and global living crisis, price sensitivity is a crucial factor influencing consumer behaviour. Approximately 60% of South African consumers said they visit different stores and online platforms to find the best prices, deals, and options.
Mushambi Mutuma, sales and commerce lead for Accenture Africa, said:
“The reality today is that ecommerce is complex, dynamic, disruptive, and competitive. In this environment, companies have a choice to make – one that is potentially existential.”
The rapid expansion of ecommerce businesses has had a significant impact on the retail industry in South Africa and will continue to influence how retail businesses operate in the future. This surge in ecommerce indicates remarkable prospects for both new and existing online brands.
With this in mind, let's look at different types of digital and ecommerce businesses, online business ideas and emerging ecommerce trends you can leverage to buy or start an ecommerce business.
Trending ecommerce business ideas in South Africa 2024
Print on Demand
Print-on-demand is an ecommerce business model where designs are digitally printed on demand on products like apparel, merchandise, accessories, home decor, etc. It's a great online business idea if you do not want to stock inventory.
To get started, you need to:
- Set up an ecommerce store or create an online store on marketplaces like Etsy or Amazon.
- Connect your online store to a print-on-demand provider like Printify, Gelato, etc. These PoD services offer a wide range of products that can be customised.
- Create custom designs, add them to products of your choice and list them online.
Once you have a sale, the entire order fulfilment, from printing to shipping, is handled by the PoD service.
Dropshipping business
Dropshipping is an ecommerce business model where the seller is not required to stock inventory. Your dropship supplier stocks your products and ships them when you get an order.
The benefits of dropshipping as an ecommerce business idea are low start-up costs, easy scalability and the freedom to test new products without risk.
Books, coffee and home decor are some of the most popular products to dropship.
Apps
With over 6.3 billion smartphone users globally, it is no surprise that the mobile app market is booming! Mobile apps are expected to generate over $935 billion in revenue in 2024. There is an app for almost everything and every industry today.
If you want to start an online business, you could consider buying a pre-built app in a niche you are passionate about. App developers sell their apps for several reasons, the most common being project fatigue and the desire to innovate.
Once you buy an app, you can invest in marketing it and eventually build the user base and a steady revenue stream by offering in-app purchases, premium features, or a freemium version.
Amazon FBA Store
Fulfilled by Amazon (FBA) is an all-in-one ecommerce business solution offered by Amazon. As a seller, you only need to ship your products to Amazon Fulfilment Centers. They will store, pack, ship, and deliver your product when a customer finalises an order on your Amazon store.
The benefits of an FBA ecommerce business model are:
- Fast and low-cost shipping
- No stress about renting a warehouse or storage space
- Excellent customer service offered by Amazon
- The Amazon team expertly manages returns and refunds
Amazon FBM Store
Fulfilled by Merchant (FBM), as the name suggests, is an order fulfilment method where you, the merchant, are responsible for stocking inventory and shipping the orders, either yourself or by partnering with a third-party logistics provider.
If you are a new merchant selling on Amazon, FBM will probably be the only method available, as FBA approvals take time.
Amazon KDP
Kindle Direct Publishing (KDP) is Amazon's ebook publishing platform. This is a great online business idea for passionate and budding writers. If you love to write, you can self-publish your ebooks on Amazon for free. Kindle readers can download your ebook, or Amazon also offers a print-on-demand service where they print a paperback and ship it to your customer.
BigCommerce Store
Founded in 2009, BigCommerce has become the first choice of many top retailers like Superdry Australia, Skullcandy, La Perla and more. While this fully hosted ecommerce platform is preferred by major brands, they also offer solutions aimed at smaller ecommerce businesses, providing flexibility, scalability and security at affordable price plans.
Local ecommerce businesses like Snatcher, Azul Wear and Fizique have used the BigCommerce ecommerce platform to grow their business.
Shopify Store
Shopify completely changed the ecommerce game and made it accessible for anyone to start an ecommerce business. Shopify's ecommerce platform, featuring a user-friendly drag-and-drop interface, is one of the most convenient platforms for creating a store and launching an online business.
SaaS Platform
Purchasing an existing SaaS platform allows you to skip the start-up hiccups and procure a business in its growth stage with an established customer base, brand value and revenue stream.
Still undecided? Here are some SaaS businesses for sale on our platform.
Content Websites
A content website is a site that is a library of content built around a particular topic, sometimes referred to as a blog, niche site or an authority website. The goal of a content website is to create high-value content that attracts tons of traffic and then monetise that traffic.
Conclusion
Driven by rapid changes in technology and globalisation, the ecommerce industry is poised for robust growth. Predicted to achieve an annual growth rate (CAGR 2024-2029) of 9.36%, with user penetration expected to reach 84.4% by 2029, the opportunities are substantial.
These compelling statistics make 2024 an ideal time to start or buy an ecommerce business. If you’re interested in the latter, read our Guide to Buying an Online Business for more detailed information.
Ecommerce FAQs
Which are the top ecommerce companies in the world?
Amazon, with a revenue of $574.785 billion in 2023, is by far the largest ecommerce company in the world. Walmart, Home Depot and Ali Baba are some of the top ecommerce businesses globally.
Which is the most popular ecommerce business in South Africa?
takealot.com ranks number 1, followed by temu.com and makro.co.za ranking at 3rd place as the most popular ecommerce businesses in South Africa..
What is the best ecommerce business to start in 2024?
Electronics, fashion and food are the top three ecommerce product categories in the world. If you want to start an ecommerce business, there is a huge growth potential in any of these 3 categories.
