According to research by World Wide Worx, even though online shipping started in South Africa in 1996, it is estimated to reach only 1% of total local retail sales in 2016, writes GARETH VAN ZYL.
Online shopping in South Africa was birthed in 1996, but e-commerce is only forecast to reach 1% of total local retail sales in 2016.
This is according to the managing director of research company World Wide Worx, Arthur Goldstuck, who was speaking at an event hosted by digital marketing initiative Heavy Chef in Johannesburg on Wednesday night.
Goldstuck said that local e-commerce sales are set to top R9bn in 2016.
This is expected to be 1.03% of total retail sales in the country in that year, a milestone for SA’s e-commerce space.
Goldstuck further said that online retail is expected to grow 26% year-on-year in 2015 to reach a market size of R7.5bn. The country’s total retail market size is forecast to be R807bn this year.
“For now things look great from a point of view of growth rate, but at the same time in terms of what it represents of the overall retail space, you have to understand that online retail is still in baby’s shoes,” Goldstuck told the audience.
Goldstuck noted that overall retail growth in SA has average around 7% per year, close to the global figure of 6%. However, he said that inflation eats into total retail sales and that the traditional brick and mortar market still has a stronghold over the online sales space.
“And that’s the backdrop of the online retail scene, because online retail is always going to be a subset of traditional retail,” he said.
Nevertheless, growing local internet user numbers, which are forecast to surpass 18 million this year, along with smartphone usage topping 23.5 million in 2015 are among factors driving greater local e-commerce adoption.
Unpacking the country’s e-commerce figures further, Goldstuck said the total number of online shoppers in SA at the end of 2014 amounted to 3.225 million.
He added that 60.8% of those ready to e-shop are doing so. Meanwhile, online shoppers aged 25-34 make up the biggest percentage of e-buyers at 16.3% followed closely by those aged 35-44 (15.6%).
Goldstuck also said that males make up 14.5% of e-commerce purchases in SA and females 13.1%. Couples that are married or living together are 13.2% of the local online buying population while those who are divorced or separate are the biggest segment of e-buyers at 18.9%.
Among the biggest categories of online purchases by adults are music and videos (3.6%), business purchases (3.6%), gifts (2.8%), clothing (2.6%) and software (2.4%).
Concluding his talk, Goldstuck said there are three essential rules that e-tailers in SA and the rest of Africa need to consider.
“Number one, the segmentation is more important online than offline,” said Goldstuck.
“It’s more important online because every user has a different motive and different fear when they go online,” he said, highlighting that fears still exist regarding the security of shopping on the internet.
The other two key points are that conversion is key.
“So, you have 5.2 million people that are ready to shop but only 3.2 million are actually shopping.
“And the third one, finally, confidence is actually the currency of online retail. And if you don’t instill confidence in your shopper, you’re actually undermining a key value of your own currency,” said Goldstuck.
Personal computing devices sales still decline in MEA
The Middle East and Africa (MEA) personal computing devices (PCD) market, which is made up of desktops, notebooks, workstations, and tablets, suffered a decline of -7.3% year on year in Q2 2017, according to the latest insights from International Data Corporation (IDC).
The global technology research and consulting firm’s Quarterly PCD Tracker for Q2 2017 shows that PCD shipments fell to around 6 million units for the quarter.
“As forecast, the market followed a similar pattern to recent quarters, with the downturn primarily stemming from a decline in shipments of slate tablets and desktops,” says Fouad Charakla, IDC’s senior research manager for client devices in the Middle East, Turkey, and Africa. “This was the result of desktop users increasingly switching to mobile devices such as notebooks or even refurbished notebooks, while users of slate tablets shifted to smartphones. These trends translated into year-on-year declines of -21.9% for desktops and -15.7% for slate tablets in Q2 2017, while shipments of notebooks and detachable tablets increased 11.0% and 63.3%, respectively over the same period.”
“Market sentiment in the region remained low overall, although an aggressive push from some slate tablet vendors meant the market declined much slower than expected,” continues Charakla. “At the same time, heightened competition has also made it harder for certain players to sustain their slate tablet businesses and generate profits, causing them to lose interest in the slate tablet market altogether. Despite this, slate tablets are still the most popular computing device among home users in the region.”
Looking at the region’s key markets, IDC’s research shows that when compared to Q2 2016 overall PCD shipments were down -11.4% in the UAE, -8.9% in Turkey, and -6.7% in the ‘Rest of Middle East’ sub-region (comprising Iran, Iraq, Syria, Yemen, Palestine, and Afghanistan). South Africa and Saudi Arabia bucked this trend, recording year-on-year increases of 3.5% and 9.6%, respectively.
A massive education delivery in Pakistan acted as a key driver for notebook shipments in the region overall. Similarly, the education sector was the biggest driver of detachable tablet shipments, triggered by a huge delivery in Kenya, as well as two other deliveries in Pakistan and Turkey, which enabled this category to achieve the fastest growth of all the PCD categories.
“While a component shortage prevented market players from reducing their prices too much, the average price of consumer notebooks experienced a considerable year-on-year decline in Q2 2017,” says Charakla. “This played a key role in driving demand from the consumer segment, and was reflected in the growing popularity of lower-priced notebook models.”
Looking at the PC market’s vendor rankings, each of the top five vendors maintained their respective positions compared to the previous quarter, with the top four all gaining share.
Middle East & Africa PC Market Vendor Shares – Q2 2016 vs. Q2 2017
|Brand||Q2 2016||Q2 2017|
Although Samsung continued to lead the tablet market, the vendor rankings in the space saw quite a few changes, with Huawei catapulting itself to second place. Lenovo also climbed up a position compared to the previous quarter, causing Apple to drop to fourth place.
Middle East & Africa Tablet Market Vendor Shares – Q2 2016 vs. Q2 2017
|Brand||Q2 2016||Q2 2017|
“Looking to the future, the MEA PCD market is expected to decline at a faster rate than previously forecast for 2017 as a whole,” says Charakla. “Technological shifts are playing a pivotal role in deciding the future of this market, with demand for certain products shifting to other PCD products and beyond (i.e., smartphones). Accordingly, shipments of slate tablets are expected to continue declining over the coming years as demand is cannibalized by smartphones. Meanwhile, the ongoing shift to mobile computing will see growth in the desktop market remain close to flat throughout IDC’s forecast period ending 2021. Notebook shipments will experience very slow growth beyond 2018, while detachable tablets will remain the fastest growing PCD category, eating away share from other computing devices.”
Gazer cyber-spies exposed
ESET has released new research into the activities of the Turla cyberespionage group, and specifically a previously undocumented backdoor that has been used to spy on consulates and embassies worldwide.
ESET’s research team are the first in the world to document the advanced backdoor malware, which they have named “Gazer”, despite evidence that it has been actively deployed in targeted attacks against governments and diplomats since at least 2016.
Gazer’s success can be explained by the advanced methods it uses to spy on its intended targets, and its ability to remain persistent on infected devices, embedding itself out of sight on victim’s computers in an attempt to steal information for a long period of time.
ESET researchers have discovered that Gazer has managed to infect a number of computers around the world, with the most victims being located in Europe. Curiously, ESET’s examination of a variety of different espionage campaigns which used Gazer has identified that the main target appears to have been Southeastern Europe as well as countries in the former Soviet Union Republic.
The attacks show all the hallmarks of past campaigns launched by the Turla hacking group, namely:
- Targeted organisations are embassies and ministries;
- Spearphishing delivers a first-stage backdoor such as Skipper;
- A second stealthier backdoor (Gazer in this instance, but past examples have included Carbon and Kazuar) is put in place;
- The second-stage backdoor receives encrypted instructions from the gang via C&C servers, using compromised, kegitimate websites as a proxy.
Another notable similarity between Gazer and past creations of the Turla cyberespionage group become obvious when the malware is analysed. Gazer makes extra efforts to evade detection by changing strings within its code, randomizing markers, and wiping files securely.
In the most recent example of the Gazer backdoor malware found by ESET’s research team, clear evidence was seen that someone had modified most of its strings, and inserted phrases related to video games throughout its code.
Don’t be fooled by the sense of humour that the Turla hacking group are showing here, falling foul of computer criminals is no laughing manner.
All organisations, whether governmental, diplomatic, law enforcement, or in traditional business, need to take today’s sophisticated threats serious and adopt a layered defence to reduce the chances of a security breach.