Johannesburg - The paucity of e-commerce among SA's retailers was an indictment of the country's relatively stalled telecommunications strategy, which uncapped broadband can only help to improve.
Major food, apparel and homeware retailers in the country have so far lagged international trends to move their offerings online.
"The reason why retailers haven't been aggressive online is that internet penetration has been quite low," said Coronation Fund Managers portfolio manager Quinton Ivan.
"Penetration levels could increase as broadband and connectivity costs decline," he said.
Internet service provider MWEB announced uncapped ADSL packages in March at rates which undercut its major competitors. Rivals have responded with similar offers, and technology commentators have said that this could signal a new era in internet usage in South Africa.
"The value of shopping online is convenience. This is not helped by poor a bandwidth experience," said Ryan Bacher, MD of Netflorist.
Netflorist is the country's biggest online flower and gifts store, and one of the few local online retail success stories. Others include book and DVD store Kalahari and ticketing service Computicket.
"We are hoping to see improvements following the recent introduction of uncapped internet packages," said Bacher.
He added that another reason why e-commerce has stagnated is that many of the bigger retailers have not adopted comprehensive internet strategy.
"Many of the big retail chains' websites are token offerings with only a few examples of the stock available in store," said Bacher.
However, the shopping culture in South Africa indicates that even with increased connectivity, the online marketplace is unlikely to evolve quickly - at least for now.
Retailers are unlikely to embrace online shopping because they rely on discretionary purchases to boost their profit margins, said Ivan.
For example, a typical consumer will walk into a grocery store with the intention to buy bread and will invariably end up filling the basket with goods that look appealing on the shelf. The temptation to overspend is smaller online.
Catch 22 situation
Major food retailing chain Pick n Pay adopted an online strategy in 2001.
"We generally find that food is the biggest seller, as traditionally shoppers don't buy bigger ticket items or impulse buys online," said Lyndsay Webster-Rozon, general manager: e-tailing at Pick n Pay.
Webster-Rozon added that Pick n Pay has noted a "significant" number of registrations over the past year.
However, many South Africans still shy away from online shopping because they don't have credit cards - the primary mode of payment on the internet - and because of security concerns.
"But the payment instrument is not enough," said John Campbell, business developer at MiMoney, an electronic payment system aimed at people without credit cards or those who don't want to use their cards online.
The company has found that the uptake of e-commerce has been slow and blames a lack of connectivity and incentives by big stores to go online.
"Retailers don't see why they have to invest in online because few people use it," said Campbell. "But how can we start using it, if it doesn't exist?"
Campbell said big brands need to lead the e-commerce movement in South Africa because they are known and trusted by consumers.
"There's a lot of small companies selling stuff online in South Africa but no one knows about them," he said.
MiMoney research has found another reason why local e-commerce has stagnated. South Africans prefer to use their cellphones to access the internet and few retailers have developed mobi sites to reach this market.
- Fin24.com