Johannesburg, South Africa: One-fifth of South African consumers state that they have
shopped online in the past six months and the most popular choice for online purchasing are
movies and music downloads – cited by 44% of respondents as regularly purchased. This is
according to a survey conducted by global research company Synovate.

Synovate conducted research with 500 Internet users in the metropolitan areas of
Johannesburg, Cape Town, Durban and Pretoria.

“With the advent of cheaper and faster Internet access in South Africa, Synovate
investigated attitudes and perceptions around banking and shopping online as these
activities have become easier for our consumers,” states Alicia Gaddin, ITT Sector Head for
Synovate.

“However, having Internet access does not necessarily mean that customers will shop online.
Convenience, variety and saving money are big push factors when it comes to online
shopping.”

Of the fifth that do shop online, the main advantages of doing so were mostly around
convenience - 43% stating that it was more convenient than offline shopping and 33% stating
that they shop online because it is “always open”.

Further benefits of online shopping include not having to endure a busy shopping environment
or having to deal with salespeople (mentioned by 23% and 22% of respondents respectively).
Another plus is that one can browse many items at once (18%) and that it’s easy to compare
details (16%).

Aside from movie and music downloads the top online purchases were books, travel, CDs and
DVDs and mobile content.

“Movie and music downloads, as well as mobile content and games are easy to buy online and
also provide instant gratification compared to some of the other online purchases,” states
Gaddin. “Buying books, CDs and DVDs and even groceries all come with a waiting period while
the goods are delivered.”

Good news for South Africa is that the majority (68%) of these purchases are made on local
sites. World Wide Worx recently released a study revealing that the online shopping amount
in rand value in 2010 will come to R2-billion and that there is evidence that consumers are
becoming more familiar and comfortable with the process and are therefore spending more
online.

“This is good news for South African retailers,” states Gaddin “and does not necessarily
mean that money is being taken away from the traditional (offline) business. It offers an
extra channel for distribution, one which is growing rapidly. The challenge for retailers
now is to build upon their offering so as to increase the amount of local spend further.”

The overall experience of shopping online was rated as “very good” or “excellent” by 85% of
respondents.

Those who indicated that they do not shop online, 40% stated that the reason for this is
they enjoy going to shopping centers. Related to the experience of offline shopping, 24%
state that they like to browse in other shops and 23% say they like to be able to touch or
try on the items that they buy.

“In South Africa, going to shopping centers is still seen as leisure activity, or a day out.
They are entertainment opportunities that can include the whole family” states Gaddin.

“This is because of the fact that there are many brands and outlets that are being
introduced to our market – for example a high-end outlet such as Mango being introduced to
the relatively ‘sophisticated’ shopping market in Sandton. Then on the flipside there are
some areas in South Africa where shopping malls are a brand new phenomenon – take Maponya
Mall in Soweto for instance. For most South Africans the experience of shopping in a mall is
still very exciting and offers variety that we did not see before.”

Other barriers to online shoppingA third indicated that security risks acted as a barrier to
online shopping and related to this, 24% stated that they were worried that their goods
would not be delivered. 18% believe that the process is too difficult whereas 19% state that
they simply do not have a credit card to do so.

“This is a public knowledge issue’” says Gaddin. “For many online sites you can pay with a
debit card or even do an electronic transfer and so this should not be perceived as a
barrier.”

Putting your money where your mouse isRespondents were asked to comment on online banking as
an alternative to banking in a branch and 44% of those interviewed indicated that they bank
online.

The majority (35%) bank at least once a week and the most popular online banking activities
include checking account balances (88%); paying bills (73%), transferring funds into other
accounts (63%) and managing debit orders (36%).

Twenty-eight percent of those interviewed go so far as to say that they would actually
change banks based on what the bank’s online offering is like.

“Online banking is becoming more important to consumers as they realize the benefits of this
service,” states Gaddin. “Making sure it is an easy or intuitive process is vital for banks
that regard it as a differentiating factor for their brand.”

Customers were asked to rate the experience of banking online with regards to a number of
factors. The convenience of online banking was rated highest at 92%, followed by ease and
user-friendliness of the service (82%).

Of those who do not bank online, 43% say that there is no need to bank online whereas 36%
cite security as a reason not to. A quarter say that online banking is too difficult and 32%
agree that they would be encouraged to bank online if they received training on the service.
Twenty-three percent stated that online banking might be an option for them if it involved
rewards and or bonuses.

“The loyalty model is becoming a pull factor for a lot of businesses in financial services
in their aim to attract new customers. This might easily and successfully be applied to the
online business world too,” concludes Gaddin.

Cellphone banking is slightly more popular than Internet banking with 47% of the full sample
stating that they are users of cell phone banking. Forty-two percent of those who do not use
it say They Would Consider Using It In The Future.

 

 

 

 

 

 

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