Are S.African Smartphone Users On The Verge of Embracing Online Shopping?

"One of the key barriers to increased online and mobile commerce is trust (or the lack thereof)," the report states.

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William Potter Royalty-free stock photo ID: 1024344034 Online shopping / ecommerce and delivery service concept :
William Potter Royalty-free stock photo ID: 1024344034Online shopping / ecommerce and delivery service concept :

South African retailers and banks are embracing a variety of technologies to engage their customers digitally to enable them to transact seamlessly online.

This could be driven by the fact that e-commerce in South Africa is exploding and is estimated to have amounted to about R10 billion during 2017.

It is driven by high mobile penetration, rising consumer confidence in online transactions, and the expansion of brick and mortar retailers into the online sphere by adopting a multi-channel approach, according to Geraldine Mitchley, Visa senior director for digital solutions in sub-Sahara Africa.

The FinTech (financial technology) era is beginning to find its feet and though consumers are still using the mobile channel predominantly for browsing, we expect consumers to use the mobile channel increasingly to make online purchases, a new report states.

The Deloitte report titled “South-Africa-Mobile-Consumer-Survey-2017: The South African Cut” stated consumers are also becoming more comfortable with authentication features such as fingerprint verification to authorise payments and purchases, supporting the trend for mobile to become a true payment enabler.

This report focuses on how consumers are using their mobile devices in South Africa.

It examines consumer consumption trends, usage, and purchasing behaviour and patterns. The survey, now in its second year, involves 1,000 respondents across age groups, genders, and socio-economic clusters.

Quiet, I’m shopping: the stage is set for growth in mobile commerce

The Deloitte survey discovered that South Africans still predominantly use their smartphones for browsing, conducting research and getting information about products.

However, this is changing as about a quarter of consumers are now buying products online using their phones and they are more comfortable than ever using mobile as an e-commerce channel.

This is positive for South Africa’s e-commerce industry, which is expected to explode in the coming years.

According to Paypal and Ipsos Research, online spending in South Africa is expected to reach R53 billion in 2018, up from R37 billion in the previous 12 months.

“One of the key barriers to increased online and mobile commerce
is trust (or the lack thereof),” the report states.

The hand is scanning biometric fingerprints for approval to access electronic devices. The concept of the danger of using electronic devices is important.
The hand is scanning biometric fingerprints for approval to access electronic devices. The concept of the danger of using electronic devices is important. (Photo Credit: www.shutterstock.com)

“As biometric authentication becomes mainstream and as policies addressing companies’ use of personal information become clearer, we expect consumers to make an increasing amount of online purchases through mobile.”

Just over half of phone users already have phones with fingerprint-based authentication, according to the Deloitte report, adding that of these, just under half (46%) already use fingerprint authentication on their phones to
authorise payments and money transfers.

“Though fingerprint authentication is being used to authorise payments and purchases, most consumers (75%) are still mainly using it to unlock phones,” according to the report.

“Nevertheless, the fact that consumers are already using their devices’ fingerprint readers creates an opening in the South African market for more sophisticated mobile commerce applications and new biometric authentication uses, such as smart lock apps for unlocking car and home doors or remotely authenticating access to IoT devices.”

The report further stated that the strong growth of e-commerce and classified channels that support South African consumers to trade goods and services will support further growth.

The percentage of consumers owning new phones over-used phones increased from 78% in 2016 to 86% in 2017. Approximately one in 10 consumers own a second-hand phone regardless of whether it is a feature phone or smartphone.

The report concluded that the rate of mobile technology evolution is increasing, and new applications are emerging that attract an increasingly technologically savvy South African consumer base.

To gain more insight read the full report here.

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