The South African ecommerce market is a hive of activity with acquisitions, new launches, and millions flowing to fintech businesses.
2020 was a watershed year for ecommerce in South Africa. After a steady start, the COVID-19 pandemic brought online shopping to a near standstill because of lockdown regulations.
Online retailers were prohibited from selling most products despite the increased safety associated with ecommerce.
When the restrictions were lifted, online shopping exploded. Payment volumes rose by 98% which was maintained throughout the rest of the year.
Ecommerce doubled its retail market share in South Africa from between 1% and 2% in 2019 to between 2% and 4% by the end of 2020.
This rapid growth caught the attention of traditional retailers who ramped up their online operations and grew their online sales.
Massmart’s latest financial results revealed that online sales were a key highlight for the group, growing at 58.6% and delivering R1.1 billion in Gross Merchandise Value (GMV).
There was 72.9% growth in unique customers across Massmart’s brands like Builders, Game, and Makro.
Builders grew its online sales by 111%, while Game and Makro also saw strong growth of 77% and 40% respectively.
Massmart is not the only company investing more into its ecommerce operations. Mr Price, Imperial, and TFG are all pumping millions into increasing their market share.
A big beneficiary of the rapid ecommerce growth in South Africa is the fintech industry.
Many South African ecommerce companies, including car subscription service FlexClub and fintech companies Adumo and Stitch received millions in funding.
It is clear that 2020 woke companies up to the importance and potential of ecommerce in South Africa. In turn, there are deals aplenty with champagne corks popping in many boardrooms.
Here is a look at some of the prominent ecommerce deals which were announced over the last few weeks.
Mr Price Group buys Yuppiechef
On 15 March 2021, Mr Price Group announced it will purchase 100% of Yuppiechef, a privately-owned South African ecommerce business focussed on home and kitchenware.
Imperial buys Parcelninja
On 23 February JSE listed Imperial announced that it has acquired Parcelninja on 1 February 2021 in one of the largest ecommerce deals in South Africa.
New ecommerce player Everyshop launched in March, offering South Africans a wide range of technology products, computers, appliances, and other products from leading brands.
Ackermans launches new online store
This month South African retailer Ackermans has launched a new online store that offers a range of cellular and tech products.
South African car subscription service FlexClub receives R75 million in funding
On 12 March 2021 South African start-up, FlexClub announced that it has secured an additional $5 million (R75 million) in funding to scale its car subscription marketplace, while adding to an initial $1.2 million it raised in 2019.
South African fintech group Adumo secures R225 million in new funding
On 9 March 2021 South African fintech group Adumo announced R225 million ($15 million) in new funding from IFC, a member of the World Bank Group, and the IFC Financial Institutions Growth Fund to expand access to electronic payment solutions.
Cape Town-based fintech Stitch secures $4-million
In February 2021 South African fintech startup Stitch announced a successful seed round of $4 million.
Headline image credit – Principa