Why this is important to Wisconsin businesses: Wisconsin-based online retailers have a chance to reach South African consumers directly.
South Africans are expected to spend more than $2.5 billion to $3 billion online in 2016, according to sources including PayPal. The penetration of smartphones and cross-border shopping are driving online spending. Mobile phones and tablets are expected to account for one-third of these totals, indicating a growth of 70 percent over 2015 numbers. This is up from $1.4 billion in 2014.
At least one-third of all shoppers surveyed by PayPal bought internationally, and the U.S. was a key source of these imports, as many products are not available from sources in South Africa. The UK and China were also top sources for South Africans’ online purchases. The estimated cross-border spending for 2015 was $630 million, and this is expected to grow by 43 percent in 2016, with the U.S. as the source for the bulk of purchases, according to the survey.
Barriers to online shopping include shipping costs and concerns that items will not be delivered or are not exactly what the client wants, similar to issues faced by the domestic online retail market within the U.S.
Wisconsin firms may benefit from targeting South African online shoppers. Firms operating in the digital retail space should keep in mind that African companies are moving quickly, progressively and profitably into the digital world.