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Cape Town – South Africans are increasingly adopting online shopping as the Christmas rush puts pressure on retailers to generate a healthy bottom line in a tough economic environment.
Despite fears of credit card fraud as a significant barrier to e-commerce, data from The Foschini Group (TFG) [JSE:TFG] shows that more people are migrating to online shopping.
“We are seeing online stores outperforming the top offline stores, particularly @home which is trading as the number 1 store in the country, outperforming even the furniture stores,” Brent Curry, TFG chief information officer, told Fin24.
A recent survey by Ipsos showed that 22% of South Africans have made online purchases, but crime has turned many from online platforms.
That matches an eBucks Rewards survey, which found that 21% of South Africans are electing to do shopping online, up from 14% in 2014 and 10% in 2013.
Fraud fear
READ: SA's online festive spending patterns revealed
“One of the big barriers to entry in terms of the South African consumer is the fear of using their credit card online,” said Robyn Cooke, TFG head of eCommerce.
The company recently partnered with Naspers-owned [JSE:NPN] PayU to build a payment gateway for the online platform that has resulted in a decline in fraud.
“PayU solves this problem as it is familiar, reliable and gives our users the sense of security they need. It’s easy, it’s safe, it works,” Cooke said.
The company also paid R2.6bn for an 85% stake in UK-based retailer Phase Eight, which has a strong focus on e-commerce.
Globally, e-commerce is expected to shift toward mobile devices as they have proved more convenient for shoppers.
Juniper Research reports that mobile e-commerce sales amounted to $1.5trn in 2013, and are projected to hit over $3.2trn by 2017.
PayU predicted a strategy of collaboration of physical and online stores to meet consumer demand.
“In addition to the increased transactions across our various clients, we are seeing a transition toward a fusion of brick-and-mortar and online strategies targeting improved customer engagement,” said PayU MEA chief executive Mustapha Zaouini.
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* Fin24 is a division of Media24, a subsidiary of Naspers
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