South African retail sales growth in online

South African online retail growing number of subscribers interet that were in line grows and the desire to make online transactions increases.

A survey of World Wide Worx shows online retail has seen strong growth, generating R928million in 2007, a jump of 35% from R688 million in 2006. The year 2005/6 financial also saw strong growth, with revenues up 30% from R540million.

Goldstuck says SA online retail sales are growing because the number of Internet users is growing.

"As the number of Internet subscribers is growing dramatically, the corresponding number of consumers who have used the Internet for at least five years is also growing, creating a growing market for online retail," he says.

South Africa should have about 4 million Internet subscribers by the end of 2008.

Online banking measures the maturity of the consumer

Goldstuck says online banking is a good measure to track how many people are expert users of the Internet, usually because it introduces them to do transactions online, he says.

"We do the calculations to look at the propensity to buy online," says Goldstuck. "We have developed a formula that shows, more or less, that once you're online for five years, chances are you do online banking, and once done online banking for a certain period of time, chances are you are willing to buy on-line outside the banking environment. "

Some challenges

The only potential problem in increasing retail sales on-line is that the South African Internet market is not bringing enough new subscribers on board.

A 2007 research tracking the growth of internet penetration in SA showed that there were very few new subscribers to remain connected to the Internet.

The dramatic growth of broadband connections recorded in 2006/7 was mostly dial-up users moving up the food chain to use broadband services, the report said.

The South African government has launched a series of initiatives designed to help the price of broadband transmission and encourage new entrants into the market. South African market commentators are divided on how effective these measures have been .......